Hyundai Steel Company shares expected to rise before Louisiana steel mill completion... target price: 36,000 won

[Financial News] Hyundai Motor Securities maintained its Buy rating and target price of 36,000 won, saying Hyundai Steel Company’s corporate value would rise ahead of the completion of its Louisiana steel mill in the United States. That is 29.0% above the closing price of 27,900 won on the 9th.
In a report on the 10th, Hyundai Motor Securities researcher Hyunwook Park said, “Considering that the share price rose ahead of operations during previous large-scale capacity expansions, the company’s value will increase even before the Louisiana steel mill is completed.” He added, “The recent share-price correction has also brought the price-to-book ratio (PBR) to a historically low level.”
The Louisiana steel mill, in which Hyundai Steel Company holds a 50% stake, is scheduled for completion in the first half of 2029. The report forecast high profitability after completion, taking into account U.S. steel import tariffs and increased demand for data centers.
Hot-rolled steel in the United States costs more than $1,450 per metric ton, about three times the $480 price in China. This reflects the 50% tariffs the United States imposed on imported steel products last year, as well as increased demand for steel needed to build data centers.
Hyundai Motor Securities estimated that once the Louisiana steel mill is fully operational, it will generate 5.5 trillion won in revenue, 1.2 trillion won in earnings before interest, taxes, depreciation and amortization (EBITDA), and 610 billion won in net income. It expects about 300 billion won in annual equity-method earnings to be reflected in Hyundai Steel Company’s results.
Researcher Park said, “Capacity expansions were already priced into the stock when Blast Furnaces No. 1 and 2 came online in 2010 and No. 3 in 2013.” He forecast, “This time, too, the share price is likely to rise ahead of the Louisiana steel mill’s completion in the first half of 2029.”
Results are also expected to improve next year. Hyundai Motor Securities forecast Hyundai Steel Company’s 2027 revenue at 25.106 trillion won and operating profit at 375 billion won. It estimated that operating profit would increase 41% from this year.
In the flat-steel segment, profitability is expected to improve as lower and more stable iron ore and coking coal prices widen the price spread between steel products and raw materials. H-beams are also expected to see increases in both sales volume and profit, supported by domestic investment in semiconductor facilities and rising export demand.
Taking into account the time lag between housing presales and rebar demand, demand is forecast to reach 6.74 million metric tons next year, up 5% from this year. The report assessed that although demand itself remains weak, a gradual recovery is possible.
The target price of 36,000 won was calculated by applying a target PBR of 0.24 to projected book value per share for 2027.

[email protected] Lee Jeong-hwa Reporter