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Photo = POSCO FutureM |
[Alpha Biz= Paul Lee] Seoul, June 9 – Hanwha Investment & Securities has revised down its target price for POSCO Future M from its previous estimate to KRW 140,000, citing prolonged weakness in the electric vehicle (EV) market that is expected to delay a recovery in operating rates.
According to analyst Yongwook Lee, while the company is executing its strategy effectively, it is unavoidably impacted by sluggish demand from downstream industries. A slowdown in NCA (nickel, cobalt, aluminum) battery shipments from Samsung SDI to Stellantis, driven by disappointing EV sales in the U.S., has also negatively affected POSCO Future M, which supplies cathode materials to Samsung SDI.
Additionally, the startup costs associated with new precursor plants beginning operations in Q2 and Q4 are expected to put pressure on cathode material margins.
Lee forecasts that in Q2, POSCO Future M’s cathode material shipment volume will decline by 7% YoY, while average selling prices will increase by 1% YoY. Based on this, the company is projected to post revenue of KRW 759.1 billion and operating profit of KRW 7 billion for the quarter.
While acknowledging near-term challenges, Lee highlighted the company’s successful customer diversification, enhanced value chain integration through group affiliates, and strategic positioning in the global “China plus one” supply shift as key strengths supporting its long-term fundamentals.
Nevertheless, Lee concluded that a full recovery in plant utilization rates will require more time, given the broader market softness.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
