Market: KOSPI (005490)
Brokerage : Hanwha Investment & Securities
Analyst : Jiwoo Kwon
Investment Rating : Buy (Maintained)
Target Price : 490,000 KRW (Maintained)
Core Momentum : Driven by the earnings normalization of POSCO E&C moving past heavy annual losses, the divestment of the unprofitable Zhangjiagang entity, and Senex expansion contributions, group earnings are projected to structurally level up in 2026.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained Buy rating with a target price of 490,000 KRW (maintained), offering a 59.1% upside potential from the base price of 308,000 KRW.
- Key Valuation Multiples:
- 2026F: P/E 14.3x, P/B 0.4x, EV/EBITDA 5.2x, Dividend Yield 3.6%, ROE 3.0%, EPS 21,550 KRW
- 2027F: P/E 10.1x, P/B 0.4x, EV/EBITDA 4.7x, Dividend Yield 3.6%, ROE 4.1%, EPS 30,473 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 71.98T KRW, Operating Profit of 3.41T KRW, EBITDA of 8.32T KRW, Controlling Net Profit of 1.67T KRW, Net Debt of 18.45T KRW
- 2027F: Revenue of 75.00T KRW, Operating Profit of 4.52T KRW, EBITDA of 9.87T KRW, Controlling Net Profit of 2.36T KRW, Net Debt of 21.85T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Preview:
- Consolidated revenue is estimated at 17.63T KRW (-1.0% YoY) and operating profit at 357.6B KRW (+274.9% YoY, -44.0% QoQ), missing consensus (476.7B KRW).
- Steel: Operating profit estimated at 470.7B KRW (-28.3% QoQ). Shipments fell below 8.0M tons (-3.8% QoQ) due to maintenance, elevating per-ton fixed-cost burdens.
- Infrastructure: Projected an operating loss of ~230.0B KRW reflecting Shin-Ansan Line accident costs and work stoppages (with potential residual cost risks in 4Q25 or 1Q26 depending on investigation findings).
- Battery Materials: POSCO Future M is expected to swing to an operating loss on sluggish shipments and lower utilization, with the lithium segment sustaining operating losses due to delayed utilization ramp-ups.
- 2026 Earnings Normalization Drivers:
- POSCO E&C: Expected to enter a normalization phase, turning around sharply (YoY +600.0B KRW) from large 2025 losses (~-500.0B KRW).
- Zhangjiagang Divestment: Closing the sale of chronic loss-making Zhangjiagang (expected within 1Q26) will generate an incremental profit effect exceeding 100.0B KRW.
- Infrastructure & Energy: POSCO International to contribute higher earnings following the completion of the Senex expansion in Australia.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated industrial group absorbing transient 4Q “growing pains”—impacted by facility maintenance, construction-related accident provisions, and delayed lithium ramp-ups—while locking in a structural level-up in baseline earnings power for 2026 via subsidiary normalization and the divestment of chronically unprofitable assets. With the stock trading near valuation trough levels at 0.4x P/B, downside risk is well protected, though the analyst recommends a measured stance that monitors progressive steel price recoveries and lithium utilization milestones rather than assuming an aggressive V-shaped industry rebound.
To verify whether this investment thesis continues to materialize, investors should monitor the final closing of the Zhangjiagang divestment in 1Q and its 100.0B KRW+ profit uplift, the resolution of Shin-Ansan Line liabilities alongside POSCO E&C’s return to sustained profitability, and the trajectory of domestic and Chinese steel pricing normalization alongside lithium plant operating rate recoveries. 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.
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