[Click eStock] "SeAH Steel, Gradually Entering Profit Improvement Phase"

Target Price Raised from 220,000 KRW to 260,000 KRW

Hana Securities raised the target price for SeAH Steel from 220,000 KRW to 260,000 KRW on the 16th, forecasting that although the company will experience a temporary sales slump in the first quarter of this year, it will return to a normal trajectory in the second quarter. The investment rating was maintained as 'Buy.'

SeAH Steel's standalone sales and operating profit for the first quarter of 2025 are estimated to be 395.8 billion KRW and 28.8 billion KRW, respectively, representing decreases of 13.2% and 9.4% compared to the same period last year. The operating profit is below the market expectation of 40.5 billion KRW.

Researcher Park Seongbong of Hana Securities explained, "Along with sluggish domestic demand, export shipments have also faced delays, resulting in SeAH Steel's total steel pipe sales in the first quarter being projected at 194,000 tons (a 24.8% decrease year-on-year). Regarding steel pipe raw materials, hot-rolled coil prices remained similar to those in the fourth quarter, and for thick plates, some price increases were observed mainly in imported substitute materials."

However, in the second quarter, profit improvement is expected as sales from export volumes delayed in the first quarter will be recognized, supported by the seasonal peak in the domestic steel pipe market. Researcher Park forecasted that SeAH Steel will sell 240,000 tons of steel pipes and achieve an operating profit of 35.9 billion KRW in the second quarter.

Park added, "Although the domestic steel pipe market downturn has prolonged, domestic housing starts are expected to slightly recover from the end of this year, so the domestic steel pipe market is also expected to gradually improve starting from this year as the bottom." He evaluated, "Since U.S. steel pipe distribution prices have risen sharply, the competitiveness of Korean steel pipe products for the U.S. market is limitedly affected despite the 25% steel tariff imposed by the U.S." The steady demand for onshore oil and gas pipelines, LNG (liquefied natural gas) steel pipes, and deep-sea oil pipelines in the U.S., along with the abolition of the steel quota system, also represent positive factors for SeAH Steel.