Shinhan Investment Securities said on the 18th that lithium this year has established itself as the key driver contributing to POSCO Holdings' actual profit and loss. It maintained a "buy" rating and raised the target price by 11.5% to 580,000 won from 520,000 won. The previous trading day's closing price was 467,500 won.
Shinhan Investment Securities assessed that in the first quarter of this year, POSCO Holdings sharply reduced the operating loss of the secondary battery materials institutional sector, contributing to strong companywide results.
POSCO Argentina's phase-one operating rate reached 70%, turning a monthly profit in March, and POSCO-Pilbara LITHIUM SOLUTION (P-PLS) also reduced its operating loss to around 3 billion won. POSCO HY Clean Metal (recycling) posted a profit in its first quarter after completion.
Park Gwang-rae, an analyst at Shinhan Investment Securities, said, "The lithium price environment is favorable. On the supply side, regulations on mines in Jiangxi, China, and Zimbabwe's restrictions on concentrate exports have tightened supply and demand," and added, "If a system capable of producing more than a total of 90,000 tons (t) is established by 2029, operating leverage effects will be maximized."
Park said, "However, at P-PLS, there remains a risk factor that the pace of profitability improvement may not be as fast as expected due to cost pressures from rising spodumene prices," and explained, "In Argentina, after the completion of phase-two facilities, it is essential to examine the burden of fixed costs during ramp-up, as well as recovery rates and whether quality stabilizes."