[Click eStock] "Korea Steel, Record-Breaking Performance Improvement... Market Cap 78% Held in Cash as a Bonus"

[Asia Economy Reporter Park Jihwan] Kiwoom Securities evaluated that Korea Steel, with an unprecedented improvement in performance, is also highlighted for its net cash holdings amounting to 78% of its market capitalization.

Lee Jonghyung, a researcher at Kiwoom Securities, stated, "Korea Steel's operating profit in the second quarter reached 36.4 billion KRW, marking the highest level in 13 years," and added, "Based on tight supply and demand and rising scrap metal prices, the domestic rebar benchmark price is expected to increase by a total of 85,000 KRW in the third quarter, indicating continued strong performance in the second half of the year."

Kiwoom Securities forecasted Korea Steel's operating profits for the third and fourth quarters to be 33.7 billion KRW and 38 billion KRW respectively, representing increases of 281% and 1189% compared to the previous year. If China imposes export tariffs on steel products, the performance outlook for the second half of this year and next year is expected to be further upgraded.

Furthermore, considering the net cash holdings of 360 billion KRW, which accounts for 78% of the market capitalization, the current stock price is analyzed to be absolutely undervalued. The researcher emphasized, "Supported by strong apartment pre-sales, the domestic rebar market, which follows this trend, is expected to maintain a favorable condition next year comparable to this year," and added, "The current stock price is judged to be absolutely undervalued with a price-to-earnings ratio (PER) of less than 5 based on the expected performance for this year and next year."