[Click eStock] "POSCO Holdings, Earnings Normalize from Q2... Target Price Up"

Daishin Securities raised the target price for POSCO Holdings from 450,000 KRW to 480,000 KRW on the 28th.

POSCO Holdings recorded Q1 sales of 19.4 trillion KRW (consolidated basis) and operating profit of 704.7 billion KRW. These figures represent decreases of 9.2% and 68.8%, respectively, compared to the same period last year. Although operating profit significantly declined, it exceeded market expectations. In the steel segment, recovery costs of 60.7 billion KRW were recorded due to some disruptions before full normalization of production capacity, but performance greatly improved thanks to fixed cost reductions from production volume recovery. The eco-friendly infrastructure also demonstrated profitability beyond expectations through expanded sales in the high-margin European market.

In Q2, further recovery in production and sales volume is expected as operations fully normalize. With one-time costs ending, operating profit on a consolidated basis is projected to recover to over 1 trillion KRW. Additionally, following China’s Two Sessions in March, demand recovery expectations have been adjusted, leading to a decline in raw material and steel prices due to eased supply and demand. However, Daishin Securities believes it is not yet the stage to discount the expected effects of China’s infrastructure investment in the second half of the year.

Researcher Lee Taehwan of Daishin Securities stated, "Separately from current earnings, POSCO Holdings disclosed the progress of investments in secondary battery materials, an investment roadmap for eco-friendly steelmaking transition, and a medium-term shareholder return policy for 2023?2025." He added, "We believe the company has successfully repositioned itself as a comprehensive materials company beyond steel and is leading a shareholder-friendly corporate culture through advanced shareholder return policies."