Market: KOSPI (005490)
Brokerage : Mirae Asset Securities
Analyst : Kiryong Kim
Investment Rating : BUY (Maintained)
Target Price : 620,000 KRW (Raised)
Core Momentum : Synchronized earnings normalization across infrastructure and lithium subsidiaries, paired with proactive steel price hikes across product lines, is projected to drive structural annual profit growth and expand shareholder returns.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained BUY rating, raising target price by 29% from 480,000 KRW to 620,000 KRW to reflect higher subsidiary equity valuations (such as POSCO Future M) and segment multiple adjustments (34.2% upside from the base price of 462,000 KRW).
- Key Valuation Multiples:
- 2026F: P/E 21.9x, P/B 0.6x, Dividend Yield 2.2%, ROE 3.0%, Operating Margin 4.2%, EPS 21,116 KRW
- 2027F: P/E 17.4x, P/B 0.6x, Dividend Yield 2.4%, ROE 3.6%, Operating Margin 4.7%, EPS 26,584 KRW
- 2028F: P/E 18.4x, P/B 0.6x, Dividend Yield 2.6%, ROE 3.4%, Operating Margin 4.8%, EPS 25,083 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 72.11T KRW, Operating Profit of 3.05T KRW (+67% YoY), Controlling Net Profit of 1.68T KRW
- 2027F: Revenue of 75.12T KRW, Operating Profit of 3.55T KRW, Controlling Net Profit of 2.11T KRW
- 2028F: Revenue of 77.24T KRW, Operating Profit of 3.71T KRW, Controlling Net Profit of 1.99T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Earnings Review:
- Consolidated revenue reached 17.9T KRW (+2.5% YoY) and operating profit stood at 707.0B KRW (+24.3% YoY), beating consensus (592.2B KRW) by 19%.
- Steel: Shipment volume grew (+2% YoY, +7% QoQ), but raw material cost inflation narrowed spreads, leading to a 24% YoY drop in steel operating profit.
- Infrastructure: Operating profit grew 33% YoY on POSCO International’s solid performance and POSCO E&C’s turnaround (favorable base effect following prior-year Shin-Ansan Line incident).
- Battery Materials: Narrowing losses across lithium entities (driven by higher lithium prices, rising utilization rates, and inventory valuation gains) contributed ~150.0B KRW in sequential profit improvement.
- Annual Growth & Profit Defense Factors:
- March price increases across all steel lines, followed by shipbuilding plate and attempted 2H automotive sheet price hikes, will serve as primary profit defense mechanisms.
- Lithium subsidiaries are expected to maintain loss reduction trajectories throughout the year against low 2025 bases.
- Shareholder Return Policy: Announced FY26–28 shareholder return framework targeting 35–40% of adjusted controlling net profit (excluding one-offs) through cash dividends and flexible share buybacks and cancellations.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated industrial holding company entering a distinct earnings recovery phase, anchored by base defense in core steel through price hikes and reinforced by the operational turnaround of its infrastructure and battery materials subsidiaries. This perspective places greater analytical significance on the compounding recovery of lithium utilization, base-effect turnarounds across non-steel affiliates, and the formalization of an expanded 35–40% shareholder return framework over temporary 1Q steel spread compression.
To verify whether this investment thesis continues to materialize, investors should monitor the realization of steel spread defense via the pass-through of March price hikes and 2H automotive sheet negotiations, the continuous narrowing of losses and timeline to profitability across key lithium subsidiaries, and the tangible execution of the 35–40% shareholder return ratio via cash dividends and share buybacks/cancellations. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and regulatory filings.
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