[Click e-Stock] "POSCO International Expected to See Higher Profits Than Last Year... Target Price Raised"

Production Expansion and New Palm Plantation Acquisitions

On January 20, Hana Securities analyzed that POSCO International is expected to achieve profit growth this year, driven by increased production and the effects of new palm plantation acquisitions, despite unfavorable external conditions. Accordingly, the target price was raised by 15% from the previous level to 76,000 won, and the investment rating was maintained at 'Buy'.

Yoo Jaeseon, a researcher at Hana Securities, stated in a report released that day, "Despite the decline in energy prices such as oil, operating profit is expected to improve due to the increased production at Senex in Australia, the effects of new palm plantation acquisitions, and the base effect from one-off costs in the power generation segment compared to the same period last year." He added, "In particular, as long as the supply-demand imbalance for natural gas continues in eastern Australia, Senex is likely to maintain its profit growth. The palm business is also expected to demonstrate economies of scale and a premium strategy through refining, starting in the second half of the year."

POSCO International's consolidated sales for the fourth quarter of 2025 are expected to reach around 8 trillion won, a 1.3% increase compared to the same period last year. Despite the delayed rebound in the steel market and weak energy prices, moderate growth is anticipated due to the positive effects of exchange rate increases and new subsidiary acquisitions. Operating profit is projected to reach 232.8 billion won, a 61% increase year-on-year.

By business segment, the steel division is expected to maintain last year's profit margin. In the energy division, profits from the Myanmar gas field are expected to decrease slightly, but the pressure from falling selling prices is expected to be partially offset by the rise in exchange rates. The performance of investment subsidiaries is expected to improve due to the effects of new palm plantation acquisitions and the turnaround to profitability at the motor core subsidiary. In the power generation segment, a turnaround to profitability is anticipated, driven by the base effect from one-off costs in the same period last year.

Researcher Yoo explained, "With Senex completing its production increase, it is expected to record its highest-ever quarterly profit, and this profit growth trend is likely to continue next year as the full-year effect is reflected."

The future strategy to diversify the natural gas portfolio was also positively evaluated. Researcher Yoo commented, "The financial burden from the investment decision in the Alaska LNG project is expected to be limited. On the contrary, diversifying natural gas procurement methods and benchmarks could reduce earnings volatility, and the expansion of steel exports to North America is also anticipated, which is viewed positively."