[Click e-Stock] "POSCO Future M to Benefit from Surging AI Demand... Target Price Raised"

On October 28, KB Securities raised its target price for POSCO Future M to 290,000 won and maintained its "Buy" rating, stating, "Expectations are growing that the company will benefit from the rapid surge in artificial intelligence (AI) demand, the resulting growth of the energy storage system (ESS) market, and the implementation of export permit requirements by the Chinese government."

Lee Changmin, a researcher at KB Securities, analyzed on this day, "We are raising our forecast for the compound annual growth rate of operating profit between 2027 and 2035 from the previous 20% to 24%." He estimated that next year's annual results would show sales of 3.3 trillion won and operating profit of 92.9 billion won, representing year-on-year increases of 6% and 5%, respectively. The operating margin is projected to be 2.8%.

Lee noted, "Although there are short-term uncertainties such as the expiration of the U.S. electric vehicle purchase tax credit, Korean companies are expected to outperform the overall market growth rate, given the robust growth of the ESS market and the secondary benefits from the introduction of China's export permit system."

POSCO Future M's third-quarter results exceeded market expectations, with sales of 874.8 billion won and operating profit of 66.7 billion won. The cathode materials division drove improvement, thanks to the full-scale mass production of precursors at the Gwangyang plant and increased sales to General Motors and Europe. In particular, the alleviation of fixed cost burdens due to higher utilization rates and one-off gains such as inventory valuation reversals also had a positive effect.

In the anode materials division, sales declined due to sluggish sales to domestic customers, but the operating loss narrowed thanks to inventory valuation reversals and other factors. The basic materials division also continued its solid performance, further supporting overall results.