[Click eStock] “Posco International Secures Momentum Through Active Investment”

Operating Profit Expected to Increase by 11% Year-on-Year This Year
NH Investment & Securities Maintains Posco International Target Price at 31,000 Won

[Asia Economy Reporter Gong Byung-sun] POSCO International is expected to post results exceeding market consensus in the fourth quarter of last year. Furthermore, active investments such as the acquisition of goodwill from POSCO's Japan subsidiary and the Australian natural gas company 'Senex Energy' are expected to serve as growth momentum in the future.

On the 3rd, NH Investment & Securities estimated POSCO International's fourth-quarter sales last year at KRW 8.7045 trillion, a 54% increase compared to the same period last year, and operating profit at KRW 153.5 billion, a 76% increase over the same period. These figures exceed the respective consensus by 9.79% and 6.25%.

The Myanmar gas field segment is expected to experience a delay in the full normalization of development and operating cost recovery within a certain limit until the second quarter of this year due to Myanmar's fiscal year change. However, operating profit is estimated to improve compared to the previous quarter due to a rebound in sales prices following crude oil prices.

The trading and investment subsidiaries continue to show strong steel sales following POSCO's integration of overseas export channels. Additionally, the recovery of palm harvest volume and price strength in Indonesia due to the resolution of seasonal factors, as well as growth in motor core sales due to normalization of business days, are also expected to have contributed to maintaining the trading and investment subsidiaries' operating profit in the fourth quarter of last year compared to the previous quarter.

Active investments by POSCO International are expected to be a momentum going forward. The integration of POSCO's overseas export channels, acquisition and expansion of operations of POSCO Japan subsidiary goodwill through a KRW 104.2 billion capital increase in the Japanese trading company, expansion of the food business, full-scale motor core performance, and expansion of palm sales are anticipated to act as positive factors for this year's performance. Accordingly, NH Investment & Securities estimates POSCO International's operating profit this year to increase by 11% compared to the previous year.

Dongyang Kim, a researcher at NH Investment & Securities, explained, "Operating profit increased due to the acquisition of Australia's Senex Energy," adding, "Securing hydrogen raw materials will play a key role in achieving POSCO Group's 2050 carbon neutrality vision."

Accordingly, NH Investment & Securities maintained its investment opinion of 'Buy' and target price of KRW 31,000 for POSCO International. The closing price on December 30 last year was KRW 22,450.