Daol Investment & Securities on the 12th raised its target price for SeAH Besteel Holdings, saying completion of the company's U.S. SeAH Superalloy Technologies (SST) plant is near and adding the plant's business value. It maintained a Buy rating and lifted the fair price to 83,000 won from 37,000 won. SeAH Besteel Holdings' previous day's closing price was 69,700 won.
In June this year, SeAH Besteel Holdings' U.S. SST plant is scheduled to be completed. Lee Jeong-woo, an analyst at Daol Investment & Securities, said, "The growth potential of the U.S. SST plant can be gauged in advance through Carpenter's performance," and added, "We raised the fair price by additionally reflecting the previous fair market capitalization of 1.3 trillion won and the plant's business value of 1.6 trillion won."
The SST plant has an annual production capacity of 6,000 tons of master alloys and special-alloy powder, and it is expected to supply the aircraft, defense, and space sectors.
This market is structured in favor of suppliers, and if the plant goes into full operation, the operating profit margin (OPM) in 2027 is estimated at over 20%, with annual operating profit of about 60 billion won.
The analyst said, "The launch of the anti-dumping investigation into special steel bars, another growth driver, and orders for used nuclear fuel transport and storage casks are delayed, and are expected to start in the first quarter of this year and within this year, respectively," adding, "Under Indonesia's policies, nickel production quotas are being reduced and prices are rising, and accordingly SeAH Changwon Integrated Special Steel's selling prices are also rising," expressing expectations for a recovery in the core business.