Hana Securities predicted that POSCO FUTURE M would record a loss in the first quarter. It lowered the target stock price from the previous 267,000 won to 147,000 won and changed the investment opinion from 'buy' to 'neutral.' On the 3rd, POSCO FUTURE M's stock price was 147,000 won.
On the 4th, Kim Hyun-soo, a researcher at Hana Securities, said, "The shipment volume of cathode materials from POSCO FUTURE M is expected to increase slightly compared to the previous quarter," noting that "Despite this, the shipments of mid-nickel products to Europe remain sluggish, and the increase in fixed costs during the initial sales process of artificial graphite anode materials will continue to burden overall profitability, leading to ongoing losses."
Hana Securities projected that POSCO FUTURE M's consolidated performance for the first quarter will show revenue of 761.6 billion won and an operating loss of 22.1 billion won. Researcher Kim noted, "However, as the one-time expenses incurred in the 4th quarter of last year dissipate, operating profit margins will improve slightly compared to the previous quarter."
Although the battery market is very sluggish, researcher Kim assessed that POSCO FUTURE M and the POSCO Group are preparing well for the upcoming growth period by establishing an upstream supply chain, including lithium, at key global locations.
He added, "Even so, the increasing initial expenses in promoting new businesses such as artificial graphite and precursors, along with the rising fixed cost burden during the expansion process to prepare for a sharp increase in demand by 2027, are becoming concerning." He said, "For the time being, the improvement in profitability is expected to be minimal."
This is also the background for lowering the target stock price. Researcher Kim noted, "In light of this situation, we have revised down our earnings estimates for 2027," adding that "Considering the vertical integration advantage in the supply chain compared to competitors, there is significant potential for long-term stock price growth."
A point to note is that, at this juncture, it is difficult to expect an immediate rebound in stock prices due to the prolonged sluggishness in the battery market. Researcher Kim said, "If there is a clear increase in orders detected in the second quarter as a result of the strengthening of carbon dioxide (CO2) regulations in Europe, a proactive buying approach may be possible."