Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake in Cleveland-Cliffs by early 2026.</li>
<li>Local media have mentioned that POSCO is likely to invest more than 1 trillion won (US700 million) to purchase at least a 10% stake in Cleveland-Cliffs by 2026.</li>
<li>Overall, we believe that a potential US$700 million investment in Cleveland-Cliffs for about 10% stake in the company could have a positive impact on POSCO.</li>
</ul>


POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake in Cleveland-Cliffs by early 2026.
Local media have mentioned that POSCO is likely to invest more than 1 trillion won (US700 million) to purchase at least a 10% stake in Cleveland-Cliffs by 2026.
Overall, we believe that a potential US$700 million investment in Cleveland-Cliffs for about 10% stake in the company could have a positive impact on POSCO.


POSCO: Signs a Strategic Partnership with Cleveland-Cliffs

External broker reports(aggregated public sources), Mirae Asset Securities

Mirae Asset Securities

External broker reports(aggregated public sources)

Mirae Asset Securities Co.,Ltd. provides comprehensive wealth management services. The Company offers fixed income securities brokerage, securities dealing, equity underwriting, and other services. Mirae Asset Securities also deals with mergers and acquisitions, foreign currency, and financial derivatives

Equity Bottom-Up

<ul><li>For 3Q25, POSCO Holdings reported consolidated revenue of W17.3tr (-5.8% YoY) and operating profit of W639bn (-13.5% YoY; 8% above the consensus of W591bn).</li><li>In the steel segment, revenue declined YoY, but operating profit climbed 41% YoY (to W656bn), supported by a favorable comparison and lower raw material and energy costs.</li><li>However, infrastructure operating profit fell 68% YoY, hurt by estimated losses from construction accidents at POSCO E&amp;C and cost overruns at overseas projects. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

For 3Q25, POSCO Holdings reported consolidated revenue of W17.3tr (-5.8% YoY) and operating profit of W639bn (-13.5% YoY; 8% above the consensus of W591bn).In the steel segment, revenue declined YoY, but operating profit climbed 41% YoY (to W656bn), supported by a favorable comparison and lower raw material and energy costs.However, infrastructure operating profit fell 68% YoY, hurt by estimated losses from construction accidents at POSCO E&amp;C and cost overruns at overseas projects. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

POSCO Holdings (005490 KS/Buy)Solid Steel Earnings Vs. Losses from POSCO E&C

External broker reports(aggregated public sources), Daishin Securities

Daishin Securities

Founded in 1962, Daishin Securities is a leading financial services provider in Korea. Daishin securities does its best to provide high quality financial service and to satisfy the various needs of investors. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Consensus miss likely; consolidated OP forecast at W551.6bn (-25.8% YoY)</li><li>Steel recovery in view, but higher construction and lithium costs to cap results</li><li>Cost uncertainty tempers investment appeal; steel-led turnaround ahead</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Consensus miss likely; consolidated OP forecast at W551.6bn (-25.8% YoY)Steel recovery in view, but higher construction and lithium costs to cap resultsCost uncertainty tempers investment appeal; steel-led turnaround aheadContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

POSCO Holdings (005490 KS Oct 22, 2025) - Elevated Cost Uncertainty

Cross Asset Strategy

<ul>
<li>NPS and other local pension funds net sold approximately 2.5 trillion won in KOSPI included stocks in the past month (as of 23 June).</li>
<li>Top stocks net sold by the NPS and local pension funds in the past one month include Samsung Electro Mechanics, SK Square, and Mirae Asset Securities. </li>
<li>Top stocks net purchased  by the NPS and local pension funds in the past one month include Naver, SK Hynix, and Hyundai Mobis. </li>
</ul>


NPS and other local pension funds net sold approximately 2.5 trillion won in KOSPI included stocks in the past month (as of 23 June).
Top stocks net sold by the NPS and local pension funds in the past one month include Samsung Electro Mechanics, SK Square, and Mirae Asset Securities. 
Top stocks net purchased  by the NPS and local pension funds in the past one month include Naver, SK Hynix, and Hyundai Mobis. 


NPS: Net Seller of Korean Stocks in the Past Month (What Is It Buying and Selling?)

Thematic (Sector/Industry)

<ul><li>Although domestic steel industry conditions are likely to improve only modestly in 2H26, we expect the sector’s valuation discount to narrow on improving earnings.</li><li>The KRX Steel Index is trading at 0.68x P/B, with its discount to the KOSPI widening to 67% (vs. post-2008 average of 33%).</li><li>We expect earnings to improve meaningfully YoY, supported by higher domestic steel prices following antidumping measures and favorable base effects.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Although domestic steel industry conditions are likely to improve only modestly in 2H26, we expect the sector’s valuation discount to narrow on improving earnings.The KRX Steel Index is trading at 0.68x P/B, with its discount to the KOSPI widening to 67% (vs. post-2008 average of 33%).We expect earnings to improve meaningfully YoY, supported by higher domestic steel prices following antidumping measures and favorable base effects.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

[2H26 Outlook] SteelRecovery remains slow, but valuations are compelling

South Korea

POSCO Holdings Inc. manufactures and distributes steel products. The Company produces crude steel, hot rolled steel, cold rolled steel, stainless steel, steel plates, wire rods, galvanized steel, electrical steel, and other related products. POSCO Holdings markets its products worldwide.

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POSCO Holdings (005490 KS)

POSCO: Signs a Strategic Partnership with Cleveland-Cliffs

POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake...

Douglas Kim