[Market Focus] POSCO Future M Falls on 1.1 Trillion Won Rights Offering Decision

POSCO Future M is trading lower following its decision to conduct a rights offering.

As of 9:11 a.m. on May 14, POSCO Future M was trading at 112,000 won on the Korea Exchange, down 8,100 won (6.74%) from the previous day.

The previous day, after the regular session closed, POSCO Future M announced that it had decided on a rights offering worth approximately 1.1 trillion won. The company will issue a total of 11.48 million new shares, with the offering price set at 95,800 won per share. This rights offering is intended to respond to the restructuring of material supply chains in Europe and the United States. The funds raised will be used for the operation of a precursor plant to meet mineral qualification requirements for cathode materials (288.4 billion won), investment in cathode material facilities in Canada (353.4 billion won), and investment in domestic graphite facilities (277.3 billion won).

Securities firms have successively lowered their target prices for POSCO Future M, reflecting the dilution from the rights offering. NH Investment & Securities lowered its target price from 170,000 won to 145,000 won. DB Financial Investment cut its target by 17% to 140,000 won. Hana Securities also lowered its target from 147,000 won to 124,000 won. Joo Minwoo, an analyst at NH Investment & Securities, explained, "While there is little change to earnings forecasts, we lowered the target price by 14.7% from the previous level to reflect the 14.8% dilution from the new share issuance."