POSCO Holdings (005490.KS) shares are approaching the 530,000 won mark, just two days after reclaiming the 500,000 won level. For shareholders who held the stock through more than two years of stagnation, the long silence appears to be turning into a reward phase.
According to the Korea Exchange, POSCO Holdings was trading at 536,000 won as of 1:30 p.m. Friday, up 30,000 won, or 5.93%, from the previous day. After closing at 500,000 won on Monday and 519,000 won on Tuesday, the stock extended its rally to enter the 530,000 won range. On a closing basis, it is the first time in about two years that the stock has surpassed 500,000 won.
The chart shows a classic V-shaped recovery. After peaking at 764,000 won in 2023, the stock slid steadily, eventually giving up the 500,000 won level, before entering a full recovery track this year. The stock, which fell nearly 50% in 2024, rebounded about 20% last year and has surged roughly 70% so far this year.
The mood on online stock forums has also shifted. "I'm glad I held onto it for years. The more I look at the chart, the prouder I feel," one shareholder wrote.
The primary driver of the rally is a first-quarter earnings surprise. POSCO Holdings' consolidated operating profit in the first quarter came in at 707 billion won ($520 million), up 24.3% from a year earlier and exceeding market consensus. Revenue rose to 17.9 trillion won ($13.1 billion), an increase of nearly 1 trillion won from the previous quarter. In the steel segment, headquarters' standalone profit declined due to higher raw material costs from the strong dollar, but expanded overseas sales and cost-cutting efforts offset the impact, bringing the segment's overall profit back into growth.
The rebound in the battery materials segment was even more striking. POSCO Future M swung to a profit from the previous quarter, while POSCO Argentina posted its first monthly profit in March, driven by expanded output and rising lithium prices. The company expects its first quarterly profit in the second quarter.
Analysts say the real re-rating is only just beginning. While the recent surge has been largely driven by improving steel market conditions, the value of the lithium business has yet to be fully reflected in the share price, they said. Hana Securities on Monday raised its target price to 740,000 won, citing the need to reassess the lithium business's value. That implies roughly 40% additional upside from the current level.
POSCO Holdings' lithium production capacity consists of 43,000 tons from the first and second phases of hard-rock lithium operations in Australia and 25,000 tons from the first phase of salt lake operations in Argentina. Once the second-phase Argentine salt lake facility of 25,000 tons is completed by the end of this year, total capacity will reach 93,000 tons, putting the company among the global top four or five.
The market is particularly focused on an inflection point in July and August this year. The utilization rate of the first-phase Argentine salt lake operation, which stood at about 60% as of the end of March, is expected to effectively reach full capacity during that period. Once the ramp-up is completed and normal operations begin, POSCO Holdings' top-line profile could take a step up, analysts said.
Brokerage reports reflecting a re-rating of the lithium business value are also coming out in succession. This trend is expected to deepen as the second quarter passes and the market moves into the second half. A full-fledged re-rating of POSCO Holdings, analysts say, is only just starting.
