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Key Summary
- **Turnaround in Performance**: POSCO Holdings achieved a consolidated revenue of 19.2590 trillion KRW and an operating profit of 819.0 billion KRW in Q2 2026, beating market consensus and signaling a clear turnaround.
- **US Electric Arc Furnace Construction**: On September 4, 2026 (local time), the company, in partnership with Hyundai Motor Group and Hyundai Steel, broke ground on a 2.7 million-ton joint venture electric arc furnace (EAF) steel mill (HPLS) in Louisiana, USA, accelerating its North American localization strategy.
- **Portfolio Rebalancing**: The company is shutting down loss-making assets, such as selling its Zhangjiagang stainless steel mill in China, while shifting its focus toward green resources, including the turn to profitability of its Argentina Brine Lithium Plant 1.
Current Market Summary
POSCO Holdings' share price has experienced prolonged volatility due to concerns over slowing global steel demand and the secondary battery "chasm." However, recent signs suggest the company is passing the bottom of the business cycle.
As of the close on September 4, 2026, POSCO Holdings (005490) finished at 337,000 KRW, down 1.46% from the previous trading day.
In the macro environment, the USD/KRW exchange rate maintains volatility at 1,349.50 KRW, with foreign and institutional investors actively trading against each other.
The benchmark KOSPI stands at 6,687.21, and the KOSDAQ is at 813.50.
According to Daily Stock's proprietary Fear & Greed Index, the KOSPI Fear & Greed Index is currently in the "Fear" (32.3) stage.
This represents a contraction from the "Neutral" (48.5) level recorded a week ago, though it shows a recovery from the "Extreme Fear" (18.4) level of a month ago, reflecting a cautious investor sentiment.
Meanwhile, the US NASDAQ index stands at 26,506.99, with the NASDAQ Fear & Greed Index maintaining a "Neutral" (41.9) level.
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Financial Analysis
POSCO Holdings' Q2 2026 performance was driven by earnings defense in its core steel business and a turn to profitability in its secondary battery materials segment.
In particular, the secondary battery materials division turned a profit for the first time in nine quarters, and the Argentina Brine Lithium Plant 1 achieved its first-ever quarterly profit, laying the foundation for future growth.
Additionally, the infrastructure sector demonstrated robust performance, supported by the strong LNG and palm oil businesses of its subsidiary, POSCO International.
At the group level, the company is accelerating asset efficiency by targeting 129 structural reorganizations by 2028 to generate a total of 3.5 trillion KRW in cash.
| Classification (Consolidated) | 2025 (Actual) | 2026 (Forecast) | 2027 (Forecast) |
|---|---|---|---|
| **Revenue (Trillion KRW)** | 69.1 | 73.5 | 75.0 |
| **Operating Profit (Trillion KRW)** | 1.8 | 3.1 | 4.0 |
| **Operating Margin (%)** | 2.6 | 4.2 | 5.3 |
| **CAPEX (Trillion KRW)** | 6.8 | 8.3 | 5.8 |
(※ The figures for 2026 and 2027 are forecasts compiled from securities firms' consensus and reports.)
Valuation
Currently, POSCO Holdings' 12-month forward price-to-book ratio (PBR) stands at approximately 0.44x, hovering near its historical bottom.
Along with gradual hikes in selling prices in the core steel business, the earnings contribution from the lithium business is expected to become visible as Argentina Brine Lithium Plant 2 nears completion.
Despite this, market analysts point out that the stock remains undervalued, as its valuation is often viewed strictly through the lens of traditional steel cycles, failing to fully reflect its long-term corporate value.
If mid-to-long-term large-scale investments settle as planned and capital expenditure (CAPEX) stabilizes downward starting in 2027, a significant improvement in cash flow is expected.
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Analyst and Institutional Reports
Major domestic brokerages, including Eugene Investment & Securities, are focusing on POSCO Holdings' dual-engine structure led by its core steel business and its new growth engine, lithium.
Recently proposed target prices from analysts hover around 490,000 KRW, indicating substantial potential upside compared to the current stock price.
Experts analyze that the South Korean government's review of anti-dumping duties on imported steel and the company's strategy to establish a local electric arc furnace in the US to bypass trade barriers will serve as strong earnings buffers.
Specifically, the groundbreaking of the Louisiana EAF is viewed positively as it solidifies a local sourcing system for high-value-added automotive steel sheets with Hyundai Motor Group.
Risk Factors
- **Oversupply from China**: If the dumping of cheap steel exports driven by China's sluggish domestic economy continues, it could hinder efforts to defend domestic selling prices.
- **Escalating Global Trade Barriers**: Retaliatory tariffs and strengthening regulations in major countries like the US and Canada pose challenges to the short-term profitability of global steel trade.
- **Volatility in the Battery Market**: Global price fluctuations of key materials like lithium, cathodes, and anodes, alongside the growth rate of downstream electric vehicle demand, could delay the expansion of profit contributions.
Investment Outlook
POSCO Holdings is in the midst of a transformation, shifting its steel value chain toward high-value products while initiating the commercial production of eco-friendly future resources.
It is executing a turnaround scenario by decisively cleaning up marginal businesses through restructuring and pursuing strategic local investments.
In the short term, however, policy-driven trade environment uncertainties remain due to global exchange rate fluctuations and the upcoming US presidential election.
Therefore, investors should take a long-term approach, closely monitoring improvements in core margin spreads and quantitative quarterly earnings from overseas lithium subsidiaries, such as those in Argentina.
Investor Checklist Q&A
Q1. What were the key drivers behind the secondary battery materials division turning profitable in Q2 2026?
A1. The main drivers were the reversal of inventory valuation losses on cathode materials, a gradual recovery in supply volumes to key customers in the anode materials segment, and the first quarterly profit achieved through the stabilization of operations at the Argentina Brine Lithium Plant 1.
Q2. What is the scale and expected effect of the joint venture electric arc furnace (HPLS) in Louisiana, USA?
A2. Built in collaboration with Hyundai Motor Group with an annual capacity of 2.7 million tons, it will serve as a bridgehead to bypass US steel tariff barriers and expand its market share in the North American automotive steel sheet market.
Q3. What is the current stock price and valuation attractiveness?
A3. As of the close on September 4, 2026, the stock price was 337,000 KRW, with a 12-month forward PBR of only about 0.44x, placing it at the very bottom of its historical valuation range.
Q4. What is the background behind the decision to sell the stainless steel plant in China?
A4. By decisively liquidating the Zhangjiagang entity in China, which had accumulated hundreds of billions of KRW in annual losses, the company aims to strengthen its financial health and redeploy those funds into high-margin hubs in North America and India.
Q5. How do a rising USD/KRW exchange rate and interest rate fluctuations affect investments?
A5. While a high exchange rate above 1,340 KRW pressures the company with higher raw material import costs, it presents a double-edged sword by improving foreign currency translation earnings for overseas subsidiaries and boosting export margins.