Investment highlights
We now believe Posco's (PKX) 1Q20 parent operating profit will come to KRW350.1bn (down from our previous estimate of KRW374.6bn). Our forecast is 21% below the consensus estimate of KRW443.8bn. We maintain BUY for the following reasons: 1) the recent economic stimulus measures proposed by China and other countries may spur demand once the coronavirus contagion begins to wane; 2) raw material price declines since 1Q20 on the increased global supply of iron ore bode well for earnings; and 3) an attractive valuation, with the stock trading close to its historical