[Click eStock] "Dongkuk Steel expects Q4 sales volume recovery"

Hana Securities forecasted on the 26th that Dongkuk Steel will see a recovery in sales volume and a decrease in costs in the fourth quarter of this year. The investment opinion 'Buy' and the target stock price of 15,000 won were maintained.

Researcher Park Seong-bong of Hana Securities explained, "Due to the sluggish construction market, domestic sales of long steel products have continued to decline in the third quarter as well," adding, "In July, domestic sales of rebar and H-beams dropped sharply by 9.9% and 16.4% respectively compared to the same period last year."

He continued, "With the decrease in housing starts and delays in large-scale construction projects, it will be difficult for demand for long steel products to recover significantly by the end of the year."

However, he analyzed, "Considering the base effects such as the end of the summer off-season, some factory renovations, and the Chuseok holiday, Dongkuk Steel's sales of long steel products in the fourth quarter are expected to increase by 8.5% compared to the previous quarter." Additionally, "sales of thick plates are also expected to increase by 2.5% compared to the third quarter due to the recovery in sales of construction-related products."

Researcher Park estimated, "With the application of lower electricity rates in autumn, Dongkuk Steel is expected to record an operating profit of 41.8 billion won in the fourth quarter," adding, "which is an increase of 29.5% compared to the previous quarter."

He also explained, "Dongkuk Steel has decided to implement interim dividends starting this year," and "the dividend has been fixed at 300 won." He added, "Last year's annual dividend was around 700 won, and this year's annual dividend is expected to be approximately 600 to 700 won," noting, "the dividend yield will reach 7 to 8%."