NH Investment & Securities maintained a buy rating on POSCO International on the 25th, stating that as energy business investments are being fully activated, the synergy from the merger with POSCO Energy is expanding. However, the target price was lowered from the previous 94,000 KRW to 83,000 KRW due to changes in earnings forecasts.
POSCO International is evaluated to be pursuing integrated synergies in the LNG (liquefied natural gas) business, covering production, storage, and power generation, through the acquisition of Australia's Senex Energy and the merger with POSCO Energy, as well as expanding eco-friendly businesses.
They have plans to strengthen LNG and eco-friendly sectors through expanded energy business investments amounting to 3.8 trillion KRW by 2025. This includes increasing Senex Energy production, the third phase of Myanmar gas field development, and expanding production of driving motor cores. They also plan to advance the supply of secondary battery materials and raw materials such as graphite.
POSCO International's sales in the third quarter of this year were 8.0459 trillion KRW, down 11% compared to the same period last year, and operating profit was 311.7 billion KRW, up 58%, falling short of market consensus (estimates).
Dongyang Kim, a researcher at NH Investment & Securities, said, "The energy business was affected by maintenance of Senex Energy, but showed strength due to high investment recovery in the Myanmar gas field following the previous quarter and carryover of unsold volumes from the previous quarter. However, the global business saw a decline in profit compared to the previous quarter due to sluggish steel market conditions, slowdown in sales of eco-friendly high value-added steel, and decreased profitability of driving motor cores. Nevertheless, a rebound in the steel market in the fourth quarter and expanded sales of driving motor cores for hybrid vehicles are expected," he explained.
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