[THE INVESTOR] Hyundai Steel’s long products remain solid despite the slow domestic construction market, said Eugene Investment and Securities on Dec. 27 maintaining a “buy” recommendation and 55,000 won (US$49.01) target price.
Its revenue on a standalone basis in the fourth quarter will surge 79 percent on-year to 4.72 trillion won and operating profit by 10.9 percent to 331.7 billion won. Although electric furnace prices will fail to rise, steel roll margins will remain on a stable upturn. The blast furnace division, however, will suffer from a decline in exports and lower prices. Next year is not very optimistic as sluggish domestic construction market and inflow of lower-priced Chinese products will undermine its electric furnace business, while commodity prices will burden its blast furnaces, said analyst Bang Min-jin.
Uncertainties loom, but it will concentrate on defending its margins through adjusting operation rates. Although sales of cold-rolled sheets and stainless steel carbon are improving slower than expected, profitability decline will be limited, said the analyst.
By Hwang You-mee (email@example.com)