[Click e-Stock] "Dongkuk Steel to Improve Operating Performance Again in Q2"

On April 28, Hana Securities predicted that Dongkuk Steel, which returned to profitability in the first quarter, will see further improvement in its operating performance in the second quarter. The investment opinion of 'BUY' and the target price of 15,000 won were maintained.

Dongkuk Steel, which recorded an operating loss in the fourth quarter of last year, turned to an operating profit in the first quarter of this year despite a sharp decline in sales volume, thanks to improved profitability in its long steel products. First-quarter sales and operating profit were 725.5 billion won and 4.3 billion won, respectively. Operating profit was nearly in line with the market consensus of 2.6 billion won.

Hana Securities expects Dongkuk Steel to benefit in the second quarter from both the peak season for long steel products and the impact of import restrictions on Chinese products. Dongkuk Steel's long steel sales in the second quarter are projected to reach 657,000 tons, up 19.3% from the previous quarter.

Meanwhile, the Ministry of Economy and Finance recently confirmed the imposition of provisional anti-dumping duties on Chinese heavy plate imports as of the 24th. As a result, imports of Chinese heavy plate are expected to decrease significantly, and Dongkuk Steel's heavy plate sales in the second quarter are forecast to surge to 237,000 tons, up 16.2% quarter-on-quarter and 31.7% year-on-year.

Analyst Park Seongbong stated, "The price of heavy plate for distribution is already rising, and there is a high possibility of price increases in negotiations with buyers. Therefore, the heavy plate spread is also expected to widen. Taking this into account, Dongkuk Steel's second-quarter operating profit is expected to reach 18 billion won." He added, "The current share price is at a PBR of 0.27 times, so valuation pressure is also limited."