Posco International, upward revision of the stock price target due to outstanding growth potential

Shinrong Securities raised the target stock price of POSCO International from the original 73k KRW to 110k KRW on the 4th, drawing significant market attention—believing that it has entered a stage of structural growth through simultaneous development of energy and materials businesses. The investment opinion remains a “Buy” with no change.

The most direct background for this upward revision of the target stock price is the company’s performance. According to Shinrong Securities data, POSCO International’s operating profit in the first quarter of this year was 357.5 billion KRW, a year-on-year increase of 32%, about 14% higher than the market consensus estimate. As a record high quarterly performance, analysts believe this is not merely a one-time improvement but indicates a fundamental change in the business structure.

This trend is expected to continue into the second quarter. Shinrong Securities forecasts a second-quarter operating profit of 351.1 billion KRW, a year-on-year increase of 12%. Especially after the outbreak of the Iran war and the rise in international energy prices, it is believed to help improve the profitability of its gas field division. POSCO International owns non-Middle Eastern energy assets such as gas fields in Myanmar and Senex in Australia, which benefit relatively when Middle Eastern risks push up energy prices. Analysts also pointed out that if upstream natural gas assets in North America complete their contracts in the second half of the year, the company, with assets close to production stages, is expected to achieve scale expansion.

The materials division is also receiving attention for its performance and growth potential. Shinrong Securities estimates that the materials division’s operating profit is about 167.1 billion KRW, a 7% increase year-on-year. In Indonesia’s palm oil business, as weather conditions stabilize, production is expected to recover, and with the addition of new assets, revenue base is likely to expand. Further evaluation suggests that as global trade conflicts intensify, companies are increasingly inclined toward supply chain diversification, and POSCO International is leveraging this as a business opportunity. It has been observed that the company has signed off-take agreements with rare earth companies in North America and Southeast Asia this year to secure raw material supply chains, and is considering investing in permanent magnet production bases within the U.S. and collaborating with global companies. Off-take agreements are pre-arranged purchase contracts for a certain volume of production, used to ensure a stable procurement network.

The securities industry ultimately believes that POSCO International has entered a stage where, on top of its traditional trading and resource development main businesses, it is expanding energy assets and diversifying supply chain businesses. As of the latest trading day closing price, the company’s stock price is 87.3k KRW. The target price above the current price can be interpreted as the future profit growth potential not yet fully reflected in the stock price. This trend may further strengthen or adjust speed based on international energy prices, progress of North American asset contracts, and actual results of rare earth and permanent magnet supply chain businesses.