to leave a comment.
Shinhan Investment Corp. [001720] announced on the 4th that it has raised its target price for POSCO International [047050] from 73,000 won to 110,000 won. The investment opinion was maintained at 'buy'.
Analyst Shin Hong-joo pointed out, "The operating profit in the first quarter of this year increased by 32% compared to the same period last year, reaching 357.5 billion won, exceeding the consensus (market average forecast) by about 14%, achieving the highest quarterly performance."
He added, "Operating profit in the second quarter is also expected to increase by 12% compared to the same period last year, reaching 351.1 billion won, and profitability in the gas field (E&P) sector is expected to improve due to the rise in global energy prices after the Iran war."
He further added, "Operating profit in the materials sector is estimated to be 167.1 billion won, a 7% increase compared to the same period last year, and the effect of external growth due to the incorporation of new assets is expected to be reflected with the recovery of production in the Indonesian palm business due to stabilized weather conditions."
Analyst Shin emphasized that POSCO International is in a phase where structural growth is being added to its stable core business.
He said, "The company holds non-Middle Eastern energy assets such as the Myanmar gas field and Australia Senex, so it is expected to benefit from the higher energy prices due to the war, and external growth is also expected in the second half with the completion of North American gas upstream asset contracts."
He further added, "The materials sector is also expected to grow by taking global trade conflicts as an opportunity for business diversification. As part of this, the company plans to secure a rare earth supply chain this year by signing off-take contracts with North American and Southeast Asian rare earth companies, and will start reviewing participation in permanent magnet US production base investments and collaborations with global companies."
POSCO International's current stock price is 87,300 won based on the closing price of the previous trading day.
Newsletter
Get key news delivered to your email every morning
to leave a comment.