April 24, 2024

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[THE INVESTOR] SeAH BeSteel’s third-quarter earnings have been low but further stock price decline is likely to be limited, said Kiwoom Securities on Nov. 2 maintaining an “outperform” rating and 19,000 won (US$16.85) target price. 

Its operating profit in the period has tumbled 63 percent on-year to 16.9 billion won, widely missing the market consensus. Its subsidiary SeAH Changwon Integrated Special Steel’s earnings did satisfy market expectations but operating profit from the parent company has come in at 5 billion won, the lowest since it in nine years. Its products for automobiles, a high-margin category, continue to struggle as its major clients remain slow while competition is growing from rivals. In addition, a series of commodities price rise have not been appropriately reflected, said analyst Lee Jong-hyeong.

Its stock price has sharply declined since the fourth quarter of 2017 to 0.30 times its price-to-book ratio, and although it lacks short-term momentum as the domestic auto industry is yet to recover, it is unlikely that its stock would further decline, the analyst added. 

By Hwang You-mee (glamazon@heraldcorp.com)