[Click eStock] "Hyundai Steel, Q2 Price Increase Effects Kick In... Target Price Up 16%"

[Asia Economy Reporter Park Jihwan] Yuanta Securities evaluated that Hyundai Steel Hyundai Steel is expected to show improved performance through price increases of major product lines in the second quarter. Accordingly, the investment opinion 'Buy' is maintained, and the target price has been raised by 15.9% from the previous 63,000 KRW to 73,000 KRW.

Researcher Lee Hyunsoo of Yuanta Securities stated, "The consolidated operating profit for the second quarter is estimated at 469 billion KRW," and emphasized, "We believe that performance improvement will appear as the price increase of shipbuilding steel plates in the first half, the price increase of domestic supply of cold-rolled steel sheets in the second quarter, and price increases in other product lines continue."

However, the result of the cold-rolled steel sheet price negotiation held in April was disappointing. This is because the increase did not cover the rise in costs.

Researcher Lee said, "At the end of May, Hyundai Steel is known to have finalized negotiations with Hyundai Motor and Kia to increase the price of domestic supply cold-rolled steel sheets by 50,000 KRW per ton from April 1," adding, "This is the first increase in four years, and when comparing the prices of iron ore and coking coal to four years ago, the weighted average cost increase per ton of molten steel production is estimated to exceed 50,000 KRW per ton."

He explained, "Spread improvements for hot-rolled, cold-rolled, and steel plates are expected to continue in the second quarter," and added, "Although the spread improvement in the distribution market for long products is not immediately applied due to the pricing structure (rebar), it is only a matter of time, and spread improvement is expected." He also added that special steel is expected to recover profitability through sales price increases.