Morningstar Rating

Stock Research and Analysis

by Zhao Hu

Bulls Say

POSCO's steel margins will see a recovery in a weaker iron ore and coal price environment.
An IPO of POSCO's noncore subsidiaries or a divestiture of its struggling businesses would create value for shareholders.
POSCO's success in technological innovation and proximity to emerging markets bode well for the company's cost leadership and long-term growth potential. Read more 

Bears Say

Despite lower raw material costs, without drastic reform to end subsidies for China's major state-owned steel mills--a low probability, in our view--POSCO is unlikely to experience a material recovery in margins.
POSCO faces increased competition from Hyundai Steel at home and cheaper Japanese steel abroad as a result of a weak yen.
It will be hard to find buyers for its many nonperforming assets given the sharp slump of South Korea's stock market and weak economic growth. Read more 

Management

We believe POSCO has a Standard stewardship rating. The recent changing of the guard has brought back capital discipline and a focus on the core business, which is an encouraging sign after the debt-fueled empire building that more than doubled firm's   Read more 

Profile

POSCO is the largest steel producer in South Korea with 40 million tons of annual crude steel capacity. The company produces mainly flat-rolled products via two integrated   Read more 

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