[Click eStock] "Hyundai Steel Lowers Earnings Forecast... Target Price Down"

On the 28th, iM Securities downgraded its earnings forecast for Hyundai Steel, lowering the target price to 32,000 KRW while maintaining a 'Buy' investment rating.

Hyundai Steel reported Q3 consolidated earnings of 51.5 billion KRW, a 47.4% decrease compared to the previous quarter. This figure significantly missed the market consensus of 96.1 billion KRW.

Researcher Kim Yoonsang noted, "The headquarters' performance was weak due to a decline in operating rates and recognition of inventory valuation losses amid sluggish market conditions, despite an expanded roll margin in the blast furnace segment. Among subsidiaries, the overseas steel service center performed reasonably well, but other subsidiaries such as Hyundai Steel Pipe are estimated to have underperformed."

He added, "There is no significant momentum expected in Q4 either. Although there are one-time performance improvement factors in subsidiaries, meaningful earnings improvement at the headquarters is unlikely."

The market outlook is expected to remain challenging for the time being. Researcher Kim stated, "Firstly, the domestic construction downturn is expected to slow earnings in the long steel segment. The sheet metal market conditions are also tough."

However, he added, "Although the market is weak, if China announces stimulus measures exceeding expectations at the National People's Congress Standing Committee from November 4 to 8, the stock price could move significantly since the price-to-book ratio (PBR) is very low, below 0.2 times."