[Edaily Reporter KIM YOON-JEONG ] Shinhan Investment Securities projected that HYUNDAI STEEL(004020)could see a revaluation of its corporate value as its earnings have bottomed out, coupled with factors such as price hikes for automotive steel sheets in the second half of the year, expanded exports to the U.S., and increased sales of structural steel for data centers. While maintaining its “Buy” investment rating, the firm lowered its target price by 10.2% to 44,000 won to reflect revised earnings estimates.

On the 1st, Park Kwang-rae, an analyst at Shinhan Investment Securities, stated, “Positive investment catalysts are taking shape, including the company having bottomed out its earnings, the potential for automotive steel plate price hikes in the second half, improved spreads for bar and section products, expanded exports to the U.S., and growth in high-value-added products for data centers.” He added, “If profitability in the core business returns to normal, we can even expect a full-scale revaluation of the stock price.”
Shinhan Investment Securities projected that HYUNDAI STEEL’s second-quarter consolidated operating profit would reach 73.9 billion won, a 371.2% increase from the previous quarter, while its non-consolidated operating profit would turn to a profit of 37.5 billion won. However, the firm predicted that these figures would likely fall short of the consensus estimates of 116.4 billion won for consolidated operating profit and 77.9 billion won for non-consolidated operating profit.
Analyst Park explained, “Spreads are expected to improve quarter-over-quarter for both flat products (blast furnace) and long products (electric arc furnace).” He added, “However, we estimate that rising scrap steel prices—driven by increased production among domestic steelmakers due to expanded exports of long products to the U.S.—may have had a somewhat negative impact,” noting that “the pace of spread improvement is weaker than initially expected, making it highly likely that operating profit will fall short of market expectations.”
He predicted that profitability would continue to improve in the second half of the year. Analyst Park said, “Scrap prices are expected to stabilize as major steelmakers are attempting to lower their purchase prices,” adding, “Exports to the U.S. are not only boosting export revenue but also reducing domestic supply, thereby helping to defend domestic prices.” He continued, “Combined with the stabilization of coking coal prices—the primary raw material for flat steel—operating profit is expected to show a step-wise improvement as we move into the fourth quarter,” forecasting that “standalone operating profit will increase to 60.1 billion won in the third quarter and 93.3 billion won in the fourth quarter.”
He also highlighted sales of long products for data centers as an investment point. Analyst Park stated, “Sales to data centers, which are drawing market attention, currently account for about 3% of long product sales,” adding, “This share is expected to expand to 6% in the future.” He further noted, “This is a factor that could have a positive impact on the AI narrative, even more so than its contribution to earnings.”