Market: KOSPI (005490)
Brokerage : Mirae Asset Securities
Analyst : Kiryong Kim, Yoojin Choi
Investment Rating : BUY (Maintained)
Target Price : 430,000 KRW (Maintained)
Core Momentum : Following the 4Q operational trough, 2026 earnings are projected to normalize significantly, supported by steel spread expansion driven by customer inventory depletion following hot-rolled anti-dumping measures, lithium loss contraction post-ramp-up, and construction base effects.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained BUY rating with a target price of 430,000 KRW (maintained), offering a 38.9% upside from the current share price of 309,500 KRW.
- Key Valuation Multiples:
- 2026F: P/E 16.4x, P/B 0.4x, Dividend Yield 3.2%, ROE 2.7%, Operating Margin 4.4%, EPS 18,856 KRW
- 2027F: P/E 9.7x, P/B 0.4x, Dividend Yield 3.2%, ROE 4.5%, Operating Margin 6.4%, EPS 32,001 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 71.51T KRW, Operating Profit of 3.14T KRW (+46% YoY), Controlling Net Profit of 1.53T KRW
- 2027F: Revenue of 73.95T KRW, Operating Profit of 4.75T KRW, Controlling Net Profit of 2.59T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Preview:
- Consolidated revenue is estimated at 17.0T KRW (-4.5% YoY) and operating profit at 342.1B KRW (+258.6% YoY), missing market expectations (457.2B KRW) by over 20%.
- Steel: Domestic ASP softened due to demand slowdown and slow destocking, but export ASP was supported by FX gains, leading to a modest overall ASP decline. Sales volume fell over 3% QoQ due to maintenance and soft demand.
- Battery Materials: POSCO Future M losses widened QoQ on customer inventory adjustments and lower shipments.
- Infrastructure: POSCO E&C is expected to recognize over 200.0B KRW in costs from Shin-Ansan Line stoppages and bad debt provisions on unsold housing. Pre-tax profit is projected to turn negative on routine year-end asset impairments.
- 2026 Normalization Drivers:
- Steel: Price hike implementations following customer inventory depletion after hot-rolled anti-dumping measures are expected to lead spread expansion.
- Battery Materials: Rising lithium prices and the completion of plant ramp-ups are projected to narrow losses toward a 2027 BEP target.
- Infrastructure: POSCO E&C is expected to see structural profit recovery driven by low base effects following over 400.0B KRW in 2025 cost recognitions.
- Global Strategic Investments: Expansion visibility is expected to broaden following the 20% stake in Hyundai Motor Group’s US EAF steel mill, including upstream investments in India and the partnership with Cleveland-Cliffs in the US.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated industrial and materials enterprise moving past a concentrated 4Q earnings trough—impacted by facility maintenance, customer destocking, and construction provisions—and entering a distinct profit normalization phase in 2026. This perspective places greater analytical significance on steel roll-margin recovery driven by customer inventory depletion following hot-rolled anti-dumping actions, progressive lithium loss contraction targeting a 2027 BEP, and tangible progress in strategic North American and Indian steel investments over transient quarterly earnings softness.
To verify whether this investment thesis continues to materialize, investors should monitor the realization of steel ASP hikes and spread expansion following customer inventory depletion post-anti-dumping actions, the pace of quarterly loss reduction across lithium assets following ramp-up completion, the stabilization of POSCO E&C post-2025 provisioning, and the concrete execution milestones of the US and Indian steel investment plans. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and regulatory filings.
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