"Cracking Down on Chinese Dumping and Soaring in Aerospace and Defense… Buy Recommendation for SeAH Besteel Holdings" [Click e-Stock]

"Benefiting from Chinese Anti-Dumping Duties"
Expectations for Growth in Special Alloys

SeAH Besteel Holdings is reportedly entering a phase of corporate value re-evaluation, thanks to a recovery in its core special steel business and the full-scale launch of new ventures, according to the stock market. As the company’s stock price remains suppressed relative to its corporate value, now may be the time to consider an aggressive buying strategy.

Turnaround in Special Steel Business... Benefiting from Chinese Anti-Dumping Duties

On September 1, Sojung Kim, a researcher at Eugene Investment & Securities, stated, “The current stock price mainly reflects the value of the company’s existing business, while the growth potential of the U.S. Texas-based affiliate SST (SeAH Superalloy Technologies) is only partially reflected.” She initiated coverage with a “Buy” rating and a target price of 56,000 won.

Kim assessed that SeAH Besteel Holdings’ main business has entered a recovery phase after hitting its bottom last year. The core product, special steel bars, is sensitive to trends in the automotive and machinery manufacturing sectors. She noted that, bolstered by revived production activity in these downstream industries, both sales volume and profit are on an upward trajectory.

In particular, she projected that constraints arising from the inflow of low-priced Chinese imports will likely be resolved with the implementation of anti-dumping (AD) duties. Kim said, “The imposition of AD tariffs on Chinese special steel bars, along with recent changes in the domestic supply chain, is expected to normalize Korea’s supply structure and lead to increased sales for SeAH Besteel.”

Focus on New Special Alloy Business for Aerospace, Aviation, and Defense

The company is also accelerating its new special alloy business, a next-generation growth engine. Utilizing SeAH Changwon Special Steel in Changwon, Gyeongnam (with a production capacity of 4,000 tons) and U.S.-based SST (6,000 tons) as bases of operation, SeAH Besteel Holdings is venturing into the nickel and titanium-based special alloy markets, seeking customer certifications and transitioning to mass production.

Kim explained, “Special alloys have high barriers to entry due to lengthy certification requirements and complex processes, but once mass production is reached, profitability will surpass that of traditional special steel products.” The company’s subsidiary, SeAH Changwon Special Steel, recently demonstrated its technological capacity by securing aerospace quality certifications and additional certification for high-purity products used in semiconductor processes.

The company’s annual sales this year are estimated at 4.151 trillion won (up 13.7% year-on-year), with operating profit at 163 billion won (up 66.0%), and net profit at 120 billion won (up 114.4%). Kim added, “As SST’s performance contributions become more evident through future customer certifications and the transition to mass production, SeAH Besteel Holdings’ valuation may expand.”

This content was produced with the assistance of AI translation services.