[Click eStock] "Posco International Expected to Achieve Record High Performance This Year"

[Asia Economy Reporter Lee Jung-yoon] Kiwoom Securities maintained a buy rating and a target price of 30,000 KRW for POSCO International on the 14th, forecasting that the company's first-quarter earnings this year will significantly exceed market expectations.

POSCO International's first-quarter sales this year are predicted to increase by 30% year-on-year to 9.2037 trillion KRW, with operating profit rising 51% to 191.7 billion KRW. The operating profit is expected to surpass the previous record high of 170 billion KRW set in the second quarter of last year and significantly exceed the market consensus estimate of 149.9 billion KRW.

Researcher Kim So-jung of Kiwoom Securities explained, "The profitability of the steel trading division is expected to perform better than previously anticipated, driven by continued favorable market conditions, increased sales volume, reflection of rising raw material prices, and the effect of integrating export channels." She added, "The Myanmar gas field is expected to realize favorable profitability as gas sales prices rise due to increases in oil, natural gas, and inflation, and the cost-recovery ratio improves as anticipated." Furthermore, the trading and investment corporations are also estimated to achieve solid performance due to sustained strong sales.

POSCO International is expected to achieve record-high earnings driven by growth in the energy sector. Following Russia's invasion of Ukraine, oil and natural gas prices surged, leading to a gradual increase in the Myanmar gas field sales price, which is linked to the oil price over the preceding 12 months. Additionally, from the second quarter of this year, Senex Energy in Australia, whose acquisition has been completed, will be reflected, initiating an annual operating profit expansion effect of approximately 20 to 30 billion KRW.

Researcher Kim also added, "POSCO International's new growth engine, the drive motor core, remains valid for mid- to long-term profit growth through the easing of semiconductor issues for automobiles and the expansion of global production bases."