2Q OP a beat; near-term outlook improving, but longer-term visibility remains limited; stay Neutral

研报英文原文证据摘录

2Q OP a beat; near-term outlook improving, but longer-term visibility remains limited; stay Neutral

erly profit on strong volume Q1 3,735 5,773A 7,871

Q2 1,975 7,624 7,730

growth. Q3 5,200 7,439 7,960

• Steel outlook improving gradually; geopolitics still a swing factor. Q4 (2,784) 7,738 7,923 FY 8,126 28,573 31,485

Management guided to clearer earnings improvement in 3Q, noting that 1H

product price increases did not fully offset accumulated raw material cost Style Exposure

inflation, with the remaining gap expected to be passed through gradually in

2H. While domestic steel sentiment is improving on Korean government

protective measures, exports could face headwinds as quotas/tariffs tighten in

overseas markets. Separately, China HRC prices, a key barometer for the

global steel cycle, remain range-bound at $450-500/t, suggesting limited

visibility on a cyclical upturn.

• Battery materials outlook mixed; multiple de-rating on lower visibility

beyond 2028. POSCO Argentina’s profit turnaround is encouraging, but the

market still lacks consensus on lithium supply/demand, leaving lithium price

news cadence-driven (e.g., mine restarts/suspensions or hidden inventory

swings). As we roll our valuation base from 2027E to 2028E and see limited

visibility for a lithium price up-cycle beyond that point, we cut our lithium

multiple from ~20x EV/EBITDA to an 11x mid-cycle multiple. We also note

that the cathode subsidiary, Posco Future M’s downstream margins are likely

to remain muted given ongoing competition and limited visibility on the LFP

cathode ramp (see our PFM 2Q review).

• Cut Dec-27 PT to W360,000; stay Neutral. We raise 2026E OP by 15% on

the stronger-than-expected 2Q results and near-term steel strength, while

making only modest tweaks (<3%) to 2027-28 estimates.