Shinhan Investment Corp. noted on the 27th that long-term growth is expected for SeAH Holdings due to the growth of its subsidiary's performance. It maintains its investment opinion of 'buy' and raised the target price from 140,000 won to 150,000 won. The previous day's stock price for SeAH Holdings was 126,000 won.
Park Kwang-rae, a researcher at Shinhan Investment Corp., said, 'The target price has been adjusted upward to reflect the value adjustments of the subsidiary SeAH Besteel Holdings and share values,' and predicted, 'As the company's long-term growth continues, a full-scale re-evaluation of stock prices will begin next year.'
Park's assessment is that the company's long-term growth is based on 'the advancement into special materials' and 'the structural demand increase generated by regulations and policies.' The company is expected to grow its scale through business diversification into CASK (used nuclear fuel transport and storage containers), North American special alloys (SST), defense materials, Saudi stainless steel seamless pipes (STS), and molybdenum projects in Vietnam, despite the long-term stagnation in the steel industry.
The growth trend can also be glimpsed through the operating results of the second quarter (April to June). SeAH Holdings reported sales of 1.7 trillion won and an operating profit of 44.6 billion won in the second quarter (April to June) of this year. This reflects an increase of 10.8% and 14.7%, respectively, compared to the same period last year.
Researcher Park noted, 'If we look only at the headline numbers, it seems there is no significant change, but recovery signals can be confirmed at the subsidiary level.' He added, 'It is significant to have achieved strong performance before meaningful revenue from new businesses or the anti-dumping effect of special steel takes effect.'
He continued, 'With the visibility of scale and profit growth increasing, the company is expected to fully achieve its value-up targets, such as a return on equity (ROE) of 6% by 2027 and a shareholder return of 25 billion won.'