Market: KOSPI (005490)
Brokerage : Hanwha Investment & Securities
Analyst : Jiwoo Kwon
Investment Rating : BUY (Maintained)
Target Price : 550,000 KRW (Maintained)
Core Momentum : Robust performance across infrastructure affiliates and solid downside defense in core steel, coupled with a turnaround to profitability in battery materials after 9 quarters, are projected to sustain earnings recovery.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained BUY rating with a target price of 550,000 KRW (maintained), offering an 83.0% upside potential from the current share price of 300,500 KRW.
- Key Valuation Multiples:
- 2026F: P/E 12.2x, P/B 0.4x, EV/EBITDA 5.2x, Dividend Yield 3.7%, ROE 3.2%, EPS 24,614 KRW
- 2027F: P/E 10.6x, P/B 0.4x, EV/EBITDA 4.7x, Dividend Yield 3.7%, ROE 3.6%, EPS 28,379 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 72.95T KRW, Operating Profit of 3.11T KRW, EBITDA of 7.61T KRW, Controlling Net Profit of 1.86T KRW, Net Debt of 16.04T KRW
- 2027F: Revenue of 74.51T KRW, Operating Profit of 4.15T KRW, EBITDA of 9.28T KRW, Controlling Net Profit of 2.15T KRW, Net Debt of 19.98T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Review:
- Consolidated revenue reached 19.26T KRW (+9.7% YoY, +7.7% QoQ) and operating profit stood at 819.0B KRW (+34.9% YoY, OPM 4.3%), beating consensus by 12.2%.
- Steel (Standalone): Operating profit recorded 274.0B KRW (+28.6% QoQ, OPM 2.9%). Carbon steel ASP increased from 920,000 KRW/ton to 962,000 KRW/ton, absorbing a 6% increase in raw material costs to defend spreads.
- Infrastructure: Operating profit reached 493.0B KRW. POSCO International delivered 429.0B KRW driven by strength in energy and trading, while POSCO E&C normalized profitability to 44.0B KRW.
- Battery Materials: Turned profitable after 9 quarters with an operating profit of 41.0B KRW. POSCO Future M recorded 27.0B KRW, POSCO Argentina achieved its first profitable quarter with 11.0B KRW, and PPLS reduced its operating loss to 1.0B KRW.
- Key Catalysts & Industry Drivers:
- If lithium prices remain around $20,000, battery materials earnings are expected to continue expanding via volume ramp-ups and additional customer qualifications.
- Rising Chinese hot-rolled coil imports and initial Gwangyang EAF costs are short-term headwinds, but output expansion and price increases in heavy plate and automotive steel are projected to support an upward trend in steel margins.
- Spodumene-to-lithium hydroxide price parity normalization at PPLS remains a key variable to monitor.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated industrial group capable of defending its baseline profitability in steel through active pricing power, while accelerating qualitative transformation via the first quarterly turnaround in battery materials and dependable infrastructure earnings. This perspective prioritizes the structural shift toward profitability in lithium assets and cash-flow contributions from energy and trading over transient cost inflation and initial facility startup expenses.
To verify whether this investment thesis continues to materialize, investors should monitor the volume ramp-up and incremental profit contribution from POSCO Argentina into 4Q alongside customer additions under a ~$20,000 lithium price environment, the normalization of the spodumene-to-lithium hydroxide price parity at PPLS, and the realization of steel price hikes in heavy plate and automotive segments. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and regulatory filings.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
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