Seoul, Korea - Hana Daetoo Securities said on February 28 that it has adjusted the target price of Hyundai Steel downward to 83,000 won from 103,000 won, with its investment opinion maintaining at "buy," based on predictions that the steel maker would lose about 200 billion won in operating profit due to a cut in automotive sheet steel prices.

 

Hana Daetoo Securities analyst Park Seong-bong said, "At the demand of Hyundai Motor and Kia Motors, Hyundai Steel will reduce its per-ton price of auto sheet steel by 80,000 won in March and April and another 90,000 won in May and June." "Even though the price cut was inevitable for the auto makers as a way to cut cost, it would affect the bottom line of Hyundai Steel as the price reduction level is large," he added.

 

"Of the 4.8 million tons of auto sheet steel expected to be sold by Hyundai Steel this year, as much as 68 percent, or 3.3 million tons, will be sold to domestic car makers. Multiplying this figure by the price cut amount will yield a loss of 250 billion won in operating profit. Given the company is expected to attempt a price hike in the second half, the operating profit loss is estimated at about 200 billion won," he commented.