[Featured Stock] "Undervalued in Steel Sector" Evaluation... Dongyang Estec Hits 52-Week High

[Asia Economy Reporter Ji Yeon-jin] Dongyang Estec, recently recognized as an undervalued stock in the rapidly rising steel industry, surged to the daily price limit on the 10th, reaching a new 52-week high.

On that day, Dongyang Estec recorded a 29.95% increase from the previous trading day to 4,295 KRW during the morning session on the KOSDAQ market. This is a 52-week high. The stock later declined and was trading at 3,960 KRW, up 19.82% as of 10 a.m.

Research Almeum analyzed Dongyang Estec on the 10th as a "hidden gem" in the steel sector, noting it is significantly undervalued compared to other POSCO hot-rolled processing companies. They suggested a fair price of 6,060 KRW. Dongyang Estec operates as a processing center for POSCO, processing and selling hot-rolled steel sheets and plates produced by POSCO.

Choi Seong-hwan, Chief Researcher at Research Almeum, explained, "With the recent sharp rise in distribution prices of hot-rolled steel sheets and plates, a revaluation is underway across POSCO processing centers," adding, "According to the Korea Iron & Steel Association, the domestic distribution price of hot-rolled steel is 1.1 million KRW per ton, a 66.7% increase compared to the previous year."

He continued, "China announced the abolition of the 'steel export value-added tax (VAT) rebate' starting May 1, which is expected to sustain the upward trend in steel prices through the second half of this year."

The VAT rebate is a refund of value-added tax on steel exports, acting as a form of export subsidy that enhanced the competitiveness of Chinese steel.

Researcher Choi added, "From the demand side, the global rise in steel prices is also supported," analyzing, "According to the World Steel Association, global steel demand this year is expected to reach 1.87 billion tons, driven by economic recovery and infrastructure investment in China and the United States, as well as a strong recovery in the automotive industry, which will increase steel demand."