Shares of Posco Holdings, the South Korean steelmaker, surged to a nearly 16-year high on Monday due to strong retail buying. The company’s second-quarter results showed promising signs of recovery, following a profit turnaround in the previous quarter. Additionally, Posco Holdings has plans to further expand its battery-materials business.
The stock rose by 17% to close at 642,000 won ($498.97), marking the highest level since October 31, 2007. This outperformed the stock benchmark Kospi, which saw a 0.7% gain for the day, according to FactSet data.
Retail investors played a significant role in driving the stock rally, with a net buying of 1.41 million shares. This outweighed foreigners’ net selling of 1.08 million shares and retail investors’ net selling of 0.32 million shares, as reported by Korea Exchange.
Despite the company reporting second-quarter earnings below expectations, market analysts remain optimistic about Posco Holdings’ future prospects. They believe that steel demand could potentially reach its lowest point later this year, sparking hope for improvement. Furthermore, analysts have praised the company’s recent guidance for expanding its battery-materials business.
Traders are optimistic that Posco Holdings’ earnings will improve in the second half of the year, along with the value of its expanding lithium business. Hyundai Motor Securities analyst H.W. Park stated that there is still room for growth in the medium term.
Posco Holdings is gradually cementing its position not only in the steel business but also in the lithium industry. The company has set an ambitious goal to increase its annual lithium production to 423,000 tons by 2030, a 41% increase from its previous target.
