“SeAH Besteel Holdings: New Businesses Hold Promise Despite Outlook for Weak Third-Quarter Results”

[Financial News] Daol Investment & Securities said SeAH Besteel Holdings would post third-quarter results below market estimates (consensus), due in part to falling steel scrap prices, but that the growth potential of new businesses such as spent nuclear fuel storage casks (CASK) and SST remained intact. It maintained its “Buy” rating and price target of 64,000 won.
Lee Jeong-woo, a researcher at Daol Investment & Securities, said on the 27th, “With the seasonal off-season coinciding with a steep drop in steel scrap prices, SeAH Besteel Corporation, which has a high share of spot sales, is expected to post weaker results than anticipated,” adding, “Expectations for growth in new businesses such as CASK and SST remain intact.”
Daol Investment & Securities estimated SeAH Besteel Holdings’ third-quarter consolidated revenue at 966.7 billion won, up 4.4% from a year earlier, and operating profit at 25.3 billion won, down 6.1%. Operating profit would be 19.1% below the consensus estimate of 31.3 billion won. Steel scrap and nickel prices, which rose in the second quarter, fell in the third quarter, leading to lower selling prices. The firm also forecast that profitability would inevitably worsen as high-cost raw materials purchased earlier were used in production.
However, sales volumes are expected to remain steady. Third-quarter sales volumes at SeAH Besteel Corporation and SeAH Changwon Special Steel are projected to rise 1.3% and 6.0% year over year, respectively, to 405,000 and 109,000 tonnes. The analysis noted that demand from semiconductor plant construction is providing support despite the downturn in the construction industry.
The researcher forecast, “The Ministry of Trade, Industry and Energy recently determined dumping margins of 25.08–27.96% on Chinese-made special steel bars and recommended imposing provisional tariffs, which is expected to benefit SeAH Besteel Holdings.” He added, “Given how long it took Chinese inventories to be depleted after past anti-dumping rulings on hot-rolled steel and heavy plate, sales growth is expected to become pronounced from the second quarter of 2027.”
In the new-business segment, product certification for SST is underway, with full-scale production targeted for 2027. Procedures for the CASK business are also continuing, including public hearings with local residents. The researcher said, “Bids will need to be held in 2027 to begin operating a dry storage facility for spent nuclear fuel in 2030,” adding, “Related orders are expected to begin as early as late 2027.”

[email protected] Im Sang-hyeok Reporter