Securities firms evaluated that the decision for a paid-in capital increase by POSCO FUTURE M on the 14th alleviated uncertainties regarding capital procurement. However, they projected that a short-term drop due to stock dilution is inevitable. Consequently, they adjusted their target stock price downward.
Lee Yong-wook, a researcher at Hanwha Investment & Securities, noted that "the paid-in capital increase of POSCO FUTURE M is positive in that it alleviates uncertainties regarding funding procurement" and explained that "it was an unavoidable situation to secure additional funding for ongoing capital expenditures (CAPEX) and operational funds under the policy of maintaining the liability ratio below 200%."
He added, "POSCO FUTURE M plans to invest approximately 1.9 trillion won in facilities by 2027," and pointed out that "further procurement plans within the current investment plan will be limited." Following this paid-in capital increase, the liability ratio is expected to drop from 139% in the first quarter of this year to about 110%.
Kim Hyun-soo, a researcher at Hana Securities, remarked, "Through this investment, we assess that we have secured visibility for continued performance growth," but he adjusted the target stock price downward by 15% from 147,000 won to 124,000 won, considering the dilution caused by the increase in the number of shares issued.
Choi Tae-yong, a researcher at DS Investment & Securities, also pointed out that "the announcement of the paid-in capital increase is likely to act as a factor that alleviates uncertainties after adjustments due to dilution effects," but noted that "what is needed to connect to stock recovery is the end of inventory adjustments by client companies and the corresponding recovery in sales volumes."
He added, "A short-term decline is expected to be inevitable as a result of this paid-in capital increase," stating that "the diluted stock price is 104,000 won, down 12.6% from the previous closing price."
Earlier, POSCO FUTURE M disclosed a shareholder allocation paid-in capital increase worth 1.1 trillion won on the 13th. The number of newly issued shares is 11.48 million, accounting for 14.8% compared to the number of existing shares issued.