Researcher Lee Sang-heon at iM Securities said on the 27th that POSCO INTERNATIONAL could see its valuation (corporate evaluation value) re-rated, based on the expansion of a rare earths supply chain moving away from China.
The researcher maintained a "Buy" investment opinion on POSCO INTERNATIONAL and raised the target price to 70,000 won.
Amid competition between the United States and China, rare earths have emerged as a key strategic asset. China currently accounts for 68% of global rare earths production and 92% of refining and processing.
In this situation, POSCO INTERNATIONAL is in contact with companies in North America, Australia and Asia, and has established a single circular loop with 25 companies from rare earths mining to permanent magnet productization and post-use recycling, according to the researcher.
The researcher particularly noted that POSCO INTERNATIONAL signed a memorandum of understanding (MOU) in September with U.S.-based ReElement Technologies to strengthen the rare earths supply chain, and said the company plans to build integrated local production complexes for rare earths and permanent magnets.
The researcher also assessed that POSCO INTERNATIONAL may be able to acquire U.S. gas fields or participate in the Alaska liquefied natural gas (LNG) project. The researcher said, "If POSCO INTERNATIONAL begins full-fledged participation in the U.S. LNG business going forward, its growth potential will stand out as trading opportunities arise from supply chain expansion."