POSCO International is expected to maintain solid earnings performance in Q2 this year, according to a compilation of forecasts from 13 major domestic securities firms submitted within the recent 3 months by Yonhap Infomax on the 13th. The company's Q2 operating profit is projected at 351.6 billion won, up 12.11% year-on-year, while revenue is forecast to reach 8.4294 trillion won, a 3.5% increase. The earnings improvement is directly attributed to investments in gas fields and palm plantations, combined with energy prices rising compared to last year. Across business divisions including energy and materials, overall strong performance is anticipated, with this year marking a period when POSCO International's sustained investments are bearing fruit as reliable revenue sources.
POSCO International Q2 Earnings Forecast Shows Double-Digit Growth
Yonhap Infomax compiled earnings forecasts from 13 major domestic securities firms submitted within the recent 3 months on the 13th. POSCO International's Q2 operating profit is projected at 351.6 billion won, representing a 12.11% increase compared to the same period last year. Revenue is forecast to reach 8.4294 trillion won, up 3.5% year-on-year. Strong performance is expected across business divisions including energy and materials.
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POSCO International Q2 earnings forecast [Source: Yonhap Infomax screen number 8031]
Senex LNG Gas Field and Palm Plantation Acquisitions Drive Profit Contribution
This year is evaluated as a period when POSCO International's sustained investments are bearing fruit as reliable revenue sources. Cho Jae-won, a researcher at Kiwoom Securities, projected that increased production from the Australian Senex LNG gas field and the palm plantation acquisition effect will contribute approximately 170 billion won to operating profit growth this year. This contribution is expected to fully offset profit decreases from factors such as sluggish steel sector performance. Energy prices rising overall compared to last year also favor POSCO International's earnings.
POSCO International Expands Rare Earth Mineral Value Chain
Based on solid profit strength from businesses such as LNG, POSCO International is pursuing business portfolio expansion into strategic minerals. Rare earth minerals are representative. POSCO International is building a rare earth value chain spanning mining, refining, and permanent magnet manufacturing. To achieve this, the company is pursuing mine operations in Malaysia and Laos, and establishing rare earth separation and refining production systems in the United States. This is interpreted not merely as business expansion, but as value creation as a "non-China supply chain" in the permanent magnet market monopolized by China.
POSCO International Stock Price Falls from May Highs to 50,000 Won Range
Amid recent large-scale adjustments in POSCO International's stock price, the company is unable to find a clear catalyst for a near-term rebound. The stock price, which soared to the early 90,000 won range in May, has fallen significantly and is currently fluctuating around 50,000 won. The stock price that rose due to energy supply concerns from Middle East conflicts underwent sharp correction as war tensions eased. POSCO Holdings' recently announced subsidiary stake sale plan heightened overhang concerns. POSCO Holdings owns a 71% stake in POSCO International and stated at a recent investor day that it would reduce its stake in listed subsidiaries to 50% by the end of next year. Approximately 20 percentage points would become subject to future sale and liquidation. The underperformance of Japanese general trading companies such as Mitsubishi Corporation, grouped as peer companies, relative to indices is also affecting negative investor sentiment.
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POSCO International stock price trend this year [Source: Yonhap Infomax, ChatGPT AI generated]
Analysts Highlight Supply Chain Security Value Amid Global Protectionism
Securities firms view POSCO International's "supply chain security" narrative as still valid. Han Seung-hoon, a researcher at Shinhan Investment & Securities, analyzed that "with the expansion of global protectionism, transaction risks such as supply chain fragmentation and export restrictions, as well as procurement costs, are structurally increasing," and "POSCO International is expanding its supply chain securing areas into LNG, palm, food, and strategic minerals." He continued, "This is not a simple intermediary function, but a platform role connecting global resource supply lines and demand, and its value will be highlighted as supply chain uncertainty increases." POSCO International's stock price traded at 52,600 won, up 6.46% from the previous trading day, as of 9:53 AM on the 13th.
FAQ
Why is POSCO International's Q2 operating profit forecast to increase 12.11% year-on-year?
The earnings improvement is directly attributed to increased production from the Australian Senex LNG gas field and the palm plantation acquisition effect, which are expected to contribute approximately 170 billion won to operating profit growth this year. Additionally, energy prices rising overall compared to last year favor the company's earnings.
What caused POSCO International's stock price to fall from 90,000 won in May to around 50,000 won recently?
The stock price that rose due to energy supply concerns from Middle East conflicts underwent sharp correction as war tensions eased. POSCO Holdings' announcement to reduce its 71% stake in POSCO International to 50% by the end of next year heightened overhang concerns. The underperformance of Japanese general trading companies relative to indices also affected negative investor sentiment.
How is POSCO International expanding into rare earth minerals?
POSCO International is building a rare earth value chain spanning mining, refining, and permanent magnet manufacturing. The company is pursuing mine operations in Malaysia and Laos, and establishing rare earth separation and refining production systems in the United States. This positions the company as a "non-China supply chain" alternative in the permanent magnet market monopolized by China.
