Hana Securities said on the 23rd that SeAH Besteel Holdings' operating results are expected to improve in the first quarter of this year as major subsidiaries continue to post top-line growth. The firm kept its investment opinion at "Buy" and raised its target price to 89,000 won from the previous 39,000 won. SeAH Besteel Holdings' closing price the previous day was 73,300 won.
Park Sung-bong, an analyst at Hana Securities, said, "Four major subsidiaries of SeAH Besteel Holdings are expected to post strong top-line growth," and noted, "In particular, considering the high growth potential of new businesses, we newly applied a target price valuation method that reflects subsidiary value separately."
Specifically, the subsidiary SeAH Besteel is expected to ramp up the used nuclear fuel cask (CASK) business as the domestic construction cycle recovers. SeAH Changwon Integrated Special Steel is set to see sales of special alloys expand in earnest, and SeAH Aerospace and Defense is expected not only to increase sales but also to improve its product mix as it proceeds with investment in a new plant in Korea. In addition, SGH is projected to drive SeAH Besteel Holdings' top-line growth as its special alloy plant in the United States begins full operations from 2028.
The analyst also gave a positive assessment of first-quarter operating results this year. Park said, "Through an aggressive sales strategy in the first quarter, SeAH Besteel's special steel sales are expected to reach 390,000 tons, up 3% from the same period last year," adding, "Rising domestic scrap distribution prices, driven by lower scrap imports at year-end and reduced domestic distribution volume, are also a favorable factor."
Park added, "SeAH Besteel is pushing to widen spreads through aggressive special steel price hikes," and said, "Taking into account spread improvement at SeAH Changwon Integrated Special Steel as well, first-quarter operating profit is estimated at 27.8 billion won, up 53.8% from a year earlier."