Market: KOSPI (005490)
Brokerage : Mirae Asset Securities
Analyst : Kiryong Kim
Investment Rating : BUY (Maintained)
Target Price : 480,000 KRW (Raised)
Core Momentum : Favorable base effects post 4Q one-off recognition, paired with steel price hike implementations, commercial ramp-ups in lithium assets, and localized overseas investments to mitigate tariff risks, are projected to drive a sharp earnings rebound in 2026.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained BUY rating, raising the target price by 12% from 430,000 KRW to 480,000 KRW to factor in share price gains of key listed subsidiaries like POSCO Future M (31.9% upside from the base price of 364,000 KRW).
- Key Valuation Multiples:
- 2026F: P/E 19.8x, P/B 0.5x, Dividend Yield 2.7%, ROE 2.6%, Operating Margin 4.2%, EPS 18,340 KRW
- 2027F: P/E 14.2x, P/B 0.5x, Dividend Yield 2.7%, ROE 3.6%, Operating Margin 5.3%, EPS 25,560 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 70.999T KRW, Operating Profit of 2.998T KRW (+64% YoY), Controlling Net Profit of 1.484T KRW
- 2027F: Revenue of 73.145T KRW, Operating Profit of 3.851T KRW, Controlling Net Profit of 2.069T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Review:
- Consolidated revenue recorded 16.8T KRW (-5.4% YoY) and operating profit stood at 12.6B KRW (-86.8% YoY), significantly missing market expectations (397.7B KRW).
- Steel: Customer destocking and maintenance reduced shipments by 6.4% QoQ, while coking coal cost inflation squeezed roll margins.
- Overseas Steel: Recognized -131.9B KRW in one-off expenses (such as employee compensation) related to the ongoing sale of Zhangjiagang STS.
- Infrastructure: POSCO E&C posted an operating loss of -190.0B KRW due to work stoppages following the Shin-Ansan Line incident.
- Battery Materials: Operating losses widened by over 100.0B KRW QoQ due to POSCO Future M losses and initial ramp-up costs at lithium and precursor facilities.
- 2026 Earnings Recovery Drivers:
- Steel: Product price increases are expected to take effect following customer destocking post-anti-dumping duty impositions on hot-rolled steel.
- Subsidiaries & Divestments: Materialization of the Zhangjiagang sale within the year will remove a major loss drag (2025 operating loss of -200.0B KRW), while POSCO E&C benefits from low base effects and POSCO International expands output via Senex.
- Battery Materials: Losses are expected to narrow progressively on rising lithium prices and full commercial operations following the conclusion of plant ramp-ups.
- Global Steel Expansion: Following a 20% stake in Hyundai Motor Group’s US EAF integrated mill, plans for upstream investments in India and cooperation with Cleveland-Cliffs in the US will reduce trade tariff risks via local production.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated industrial and materials holding company moving past an earnings trough burdened by non-recurring severance charges, maintenance downtime, and construction losses, while transitioning into a structural recovery driven by steel pricing power, loss-making asset divestments, and the commercial startup of lithium plants. This perspective prioritizes the realization of steel roll-margin expansion under trade protection, battery materials loss contraction post ramp-up, and localized US/India production strategies over transient 4Q earnings weakness.
To verify whether this investment thesis continues to materialize, investors should monitor the realization of steel ASP hikes and margin recovery post hot-rolled anti-dumping actions, the final closing and deconsolidation of the Zhangjiagang plant to remove structural losses, and the commercial operation milestones and loss contraction pace across lithium and precursor facilities. 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.
Contact: Compliance and Copyright Inquiries (ksb220805@gmail.com)
