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Executive Summary
POSCO Group has announced its 'Triple-Core' strategy, shifting its core focus from steel toward lithium and energy resources.
By executing a massive investment of 29.1 trillion won over three years, the group has declared its leap forward to become a key resource provider.
To secure investment funds, the group is reviewing options to lower its stakes in listed subsidiaries to around the 50% level.
Tangible results are emerging in the secondary battery materials sector, including the first monthly profit of its Argentine brine lithium business.
Market Overview
As of July 5, 2026, the KOSPI index stands at 8,088.34, and the USD/KRW exchange rate is hovering at a high level of 1,530.00 won.
Amid global macroeconomic uncertainties, market investment sentiment remains significantly subdued.
In fact, Daily Stock's proprietary KOSPI Fear & Greed Index is currently at 21.2, clearly pointing to the "Fear" stage, similar to a week ago (35.7) and a month ago (21.6).
The Nasdaq Fear & Greed Index is also in the "Fear" stage at 31.9, suggesting a conservative approach is warranted across global stock markets.
Under these market conditions, POSCO Holdings closed at 320,000 won on the most recent trading day, July 3.
With news hitting the market that the holding company plans to sell stakes in subsidiaries to raise funds, expectations for a valuation re-rating and concerns over supply-demand imbalances are colliding.
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Financial Analysis
POSCO Holdings' consolidated revenue for the first quarter of 2026 recorded 17.876 trillion won, and its operating profit reached 707 billion won.
This was an earnings surprise, exceeding the market consensus of 599.2 billion won by approximately 19%.
Strong price defense in the steel sector, along with the solid earnings power of infrastructure and secondary battery materials subsidiaries, drove the performance.
In particular, POSCO Argentina posted its first monthly surplus in March on the back of rising utilization rates, proving its cash-generating capability.
| Item | Q1 2026 Performance (Consolidated) | Market Consensus | Change YoY/YoQ |
|---|---|---|---|
| **Revenue** | 17.876T KRW | 17.700T KRW | +1.0% |
| **Operating Profit** | 707B KRW | 599.2B KRW | +18.0% |
| **Net Profit** | 543B KRW | - | - |
Valuation
According to the financial targets formalized by POSCO Group, it plans to lift its return on equity (ROE) from 1.2% in 2025 to 4.2% by 2028.
Additionally, it has set a mid-to-long-term goal to recover its price-to-book ratio (PBR) to around 1.0x from the current 0.4x level.
The company also announced a mid-term shareholder return policy targeting a return ratio of 35% to 40% over the next three years.
In the long run, it presented a concrete blueprint to achieve revenue of 87.9 trillion won and an operating profit of 6.7 trillion won by 2028.
Analyst & Institutional Consensus
Major investment institutions, including Mirae Asset Securities, project POSCO Holdings' consolidated operating profit for 2026 to reach 3.05 trillion won, up approximately 67% year-on-year.
Analysts expect earnings recovery to be driven by margin improvements following price hikes for automotive and shipbuilding steel in the second half, alongside rising lithium utilization rates.
Currently, the securities industry's average 12-month target price stands at approximately 560,500 won.
Mirae Asset Securities maintained its "Buy" rating and a target price of 620,000 won, highly evaluating the growth potential of its business diversification.
Risk Factors
The most immediate risk is overhang concerns (potential pent-up supply) stemming from the stake sales of major listed subsidiaries (POSCO International, POSCO Future M, and POSCO DX).
During the process of liquidating stakes worth approximately 3.6 trillion won, short-term stock price volatility for these subsidiaries could increase.
Furthermore, if global lithium hydroxide prices remain stagnant for a prolonged period, the profitability of the Argentine brine and hard-rock lithium businesses might fall short of expectations.
Since the KOSPI Fear & Greed Index remains in the extreme fear territory at 21.2, downward pressure on stock prices due to deteriorating macroeconomic supply and demand cannot be ruled out.
Investment Outlook Summary
POSCO Holdings is rapidly transforming its identity beyond a simple steel company into a "key resource provider" responsible for national industrial security.
Although short-term supply-demand noise from subsidiary stake optimization and the high exchange rate environment are burdens, securing funds for long-term growth independently is positive.
It seems reasonable to approach the stock with a split-buy scenario, while monitoring signs of the secondary battery industry passing its bottom and tracking quarterly utilization rate trends at the lithium plants.
FAQ
Q1. What are the specific core areas of the 'Triple-Core' strategy?
A1. It is a strategy to restructure the business portfolio around three main pillars: Industrial Resources (steel), Strategic Resources (lithium, anode/cathode materials, rare earths, etc.), and Energy Resources (LNG, renewable energy).
Q2. Why is the 3.6 trillion won subsidiary stake sale being conducted?
A2. It is aimed at resolving the holding company discount and preemptively securing the funds needed for the group's large-scale growth investments over the next three years.
Q3. What is the schedule for profitability in the lithium business and its mid-to-long-term targets?
A3. POSCO Argentina turned a monthly profit for the first time this March, and it aims to enter the global top 5 by establishing a production system of 173,000 tons per year by 2033.
Q4. What is the gap between the current stock price and the consensus target price?
A4. Compared to the closing price of 320,000 won on July 3, 2026, the average consensus target price (560,500 won) represents an upside potential of approximately 75%.
Q5. What short-term volatility factors should investors monitor closely?
A5. Investors should monitor whether the listed subsidiaries suffer stock price shocks depending on the method of the stake sales, as well as the international price trends of lithium concentrate and lithium hydroxide.