[Edaily Reporter Kwon Oh Seok ] HANWHA INVESTMENT & SECURITIES announced on the 6th that it is maintaining its “Buy” rating and target price of 43,000 won for HYUNDAI STEEL(004020).

Kwon Ji-woo, an analyst at HANWHA INVESTMENT & SECURITIES, stated, “While a downward revision of third-quarter earnings expectations is inevitable, the weak performance is largely due to a seasonal decline in volume, and the outlook for profit growth in the fourth quarter remains valid. Earnings are expected to continue recovering in 2027, driven by factors such as lower electricity rates,” he said, adding, “While concerns over a shortfall in third-quarter earnings have been partially reflected in the stock price adjustment, the downside potential for the stock price is limited given continued expectations for earnings recovery and the announcement of shareholder return policies.”
The analyst projected that third-quarter consolidated revenue would be 5.638 trillion won and operating profit 64.9 billion won, falling 44.1% short of the consensus estimate (operating profit of 116 billion won). While profit improvement is expected to continue compared to the second quarter, the increase is estimated to be limited to 12.4 percent; standalone operating profit is also projected at 17.9 billion won, indicating a slow recovery in the core business.
Analyst Kwon stated, “The primary cause of the slump is volume. With the Chuseok holiday coinciding with the construction off-season, standalone sales volume is estimated to have decreased by approximately 10% compared to the second quarter, with sheet metal and long products declining by a similar margin. Domestic rebar sales in July also fell by 18% compared to the second quarter’s monthly average, indicating continued weak demand for long products.”
Operating profit for the fourth quarter is projected to reach 130.1 billion won, recovering to roughly double the third-quarter level. He emphasized, “As the Chuseok effect fades and sales volumes recover, while price increases for automotive steel sheets and shipbuilding plates are fully reflected, we expect raw material input costs to decline as the third-quarter strengthening of the won is reflected in production costs with a time lag.”
He added, “Operating profit in the second half is projected to be 2.7 times that of the first half, confirming the trend toward profit improvement. However, the extent of profit growth depends on the market’s acceptance of price hikes.” He further noted, “Despite the October increase in sheet steel supply prices, distribution prices for hot-rolled coil and plate fell by 1% in the first week, and hot-rolled coil imports in September rose 50% year-over-year, driven primarily by products from third countries.”