[THE INVESTOR] Hyundai Steel stock is undervalued at 0.4 times its price-to-book ratio and 5.8 percent return-on-equity, said Shinhan Financial Investment, maintaining a “buy” recommendation and raising the target price to 72,000 won (US$67.48).
Its valuation gap from market leader POSCO has grown but will begin to catch up, said analyst Park Gwang-rae.
Its operating profit in the fourth quarter will rise 5 percent on-year to 406.7 billion won, in line with market expectations. Next year it will increase 6.1 percent to 1.54 trillion won, he estimated, adding that the prospects are conservative, factoring in number of Hyundai and Kia vehicles manufactured overseas and the price of nickel that affects earnings of its subsidiary.
By Hwang You-mee (firstname.lastname@example.org)