[Click eStock] "Seah Besteel Holdings: U.S. Special Alloy Plant Value Highlighted... Target Price Raised"

Target Price Raised by 29.5% Compared to Previous Level

On December 24, NH Investment & Securities raised its target price for Seah Besteel Holdings from 44,000 won to 57,000 won, citing the increasing value of its U.S. special alloy plant (SST) amid expectations for a SpaceX IPO. The investment opinion remains 'Buy'.

Lee Jaekwang, a researcher at NH Investment & Securities, stated, "We are raising our target price by 29.5% compared to the previous level," adding, "This is due to an increase in the target valuation multiple (from EV/EBITDA 7x to 8x). As the completion of SST approaches, the value of SST is coming into focus, driven by expectations that SpaceX, a major potential customer, will go public."

If SpaceX, the space company led by Elon Musk, CEO of Tesla, goes public, the growth rate of SST is expected to accelerate. Lee explained, "It is anticipated that more than 30 billion dollars (about 44 trillion won) will be raised, with a significant portion likely to be used for expanding Starship production. The special alloys produced by SST are expected to be a key material for Starship." Musk has previously stated that his ultimate goal is to produce 1,000 Starships per year.

Although the recent sharp rise in the stock price could be a concern, the stock is not yet considered overvalued. Lee commented, "The stock price has surged 60% in about two weeks, which could be burdensome, but the current price is at a price-to-book ratio (PBR) of 0.8x, so it is not yet in the overvalued range. While it is too early to precisely calculate the value of SST, considering that Carpenter Technology, with a special alloy production capacity of 100,000 tons, has a market capitalization of around 16.5 billion dollars, SST, with a production capacity of 6,000 tons, could potentially be valued at 1 billion dollars."