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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Minyoung] On the 11th, HI Investment & Securities analyzed that Hyundai Steel's performance improvement in the second half of the year would not be significantly greater than initially expected. Consequently, they lowered the target price from the previous 42,000 won to 36,000 won and issued a 'Buy' rating. Hyundai Steel's closing price on the previous trading day was 29,200 won.
HI Investment & Securities anticipated Hyundai Steel's performance to reflect a downturn this year. Despite sluggish domestic and export conditions in the steel sector, Hyundai Steel has shown a relatively stable performance due to the decline in raw material prices and stable margins in the automotive steel sheet business.
Expectations for benefits from China's economic stimulus policies for Hyundai Steel are also not significant. Analyst Kim stated, "Due to the low price-to-book ratio (PBR), the market expected a rebound not only from core business improvement but also from expectations of Chinese stimulus measures. However, with the stimulus falling short of expectations and recent sluggish market conditions, return on equity (ROE) has also been revised downward." HI Investment & Securities estimated Hyundai Steel's ROE for this year to be 1.3%.
However, improvements in subsidiary performance are expected to support Hyundai Steel's performance.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
