[Click eStock] POSCO Future M Faces Sales Slump in Second Half... Target Price Cut to 300,000 Won↓

On the 26th, Kiwoom Securities lowered the target price of POSCO Future M from 340,000 KRW to 300,000 KRW, reflecting the weak performance in the second half of the year. However, considering the medium- to long-term growth potential, the investment rating was maintained at 'Buy.'

In a report on the same day, Junsoo Kwon, a researcher at Kiwoom Securities, stated, "We forecast 2024 earnings with sales of 4.1 trillion KRW and operating profit of 98.2 billion KRW. The pace of electric vehicle sales has not increased as quickly as initially expected," adding, "We have revised downward the sales volume guidance for the second half."

POSCO Future M's consolidated second-quarter results showed sales of 915.5 billion KRW and operating profit of 2.7 billion KRW, falling short of market consensus (operating profit of 19 billion KRW) and Kiwoom Securities' estimate (21 billion KRW). Researcher Kwon analyzed, "In the cathode materials segment, sales volume of high-nickel products increased, but revenue declined due to price drops caused by weak metal prices and a sharp decrease in N65 sales. For anode materials, sales volume remained similar to the previous quarter, but profitability deteriorated significantly due to recognition of valuation losses (-18.6 billion KRW) on work-in-progress artificial graphite anode products."

He projected third-quarter results to record sales of 964.3 billion KRW and operating profit of 20.1 billion KRW. Although shipments of N65 and N86 cathode products are expected to decrease compared to the original plan, overall sales volume is estimated to increase compared to the previous quarter due to increased sales of products converted to new production lines.

Researcher Kwon stated, "However, the valuation loss on artificial graphite recognized in the second quarter is not expected to recur in the third quarter, and profitability in the basic materials segment is expected to normalize, leading to an improvement in profitability compared to the previous quarter."