Investment highlights
POSCO (PKX) reported 2Q19 parent operating profit of KRW724.3bn, in line with the consensus and our estimate (KRW726.3bn). We reiterate BUY on POSCO for the following reasons: the stock has bottomed as it trades at the lower end of its historical P/B bands; steel price hikes are unavoidable as raw material costs will rise in 2H19; and the supply/demand balance in China is expected to improve and Chinese dealer steel prices are likely to rebound. We maintain our target price at KRW330,000.
Major issues and earnings outlook
POSCO posted 2Q19 parent