Hyundai Motor Securities on the 14th said Hyundai Steel's results will gradually improve from the second quarter as steel prices rise across major regions worldwide. It maintained a "Buy" rating and raised the target price to 46,800 won from 43,000 won. The previous trading day's closing price of Hyundai Steel was 38,500 won.
Hyundai Motor Securities expects Hyundai Steel to post 100.6 billion won in operating profit in the second quarter of this year. That is a 500% increase from the first-quarter operating profit estimate of 16.3 billion won this year.
Regarding this, Park Hyun-uk, an analyst at Hyundai Motor Securities, said, "Hyundai Steel's second-quarter operating profit is projected at 100.6 billion won, a sharp improvement from the first quarter," adding, "The price hike effect in the flat steel segment is appearing, and the long products segment is also expected to see better profitability thanks to lower fixed costs and an improved spread (price gap)."
Park added, "Steel prices in major regions around the world, including Korea, are rebounding," and "Hyundai Steel's results will gradually improve from the second quarter, with a large year-over-year improvement in operating profit."
Stronger profitability was also projected. Since the imposition of anti-dumping duties on hot-rolled steel from China and Japan that took effect last year, imports of hot-rolled products have decreased, while domestic hot-rolled distribution prices are rising.
Park said, "In the first quarter of this year, hot-rolled imports fell 40% from a year earlier," adding, "Since the imposition of anti-dumping duties on Chinese and Japanese hot-rolled products, the influence of imports has been shrinking."
Park added, "In Korea, hot-rolled distribution prices have been rising sharply since March, from 800,000 won at the start of the year to 840,000 won last month and 930,000 won this month."