PKX Latest Report

# Financial Performance

Posco (stock symbol: PKX) reported a total operating revenue of US$183.2137 billion as of September 30, 2024, a 3.36% decrease from US$189.6083 billion as of September 30, 2023. This change reflects the pressure faced by the company in terms of operating revenue, possibly influenced by various factors.

## Key Financial Data

1. **Revenue Decline**: The operating revenue in 2024 was US$183.2137 billion, a 3.36% YoY decrease, indicating challenges in the company's competition and demand.

2. **Market Environment Impact**: Global steel demand weakened due to economic slowdown, particularly in major consumption markets (such as China, the US, etc.) where construction and infrastructure investments slowed down, leading to a decrease in demand.

3. **Intensified Price Competition**: Increased competition within the industry led to a decrease in product prices, affecting the company's operating revenue.

4. **Rising Production Costs**: The rise in raw material prices (such as iron ore, coal) increased production costs, although the company tried to pass on the costs through price hikes, but market competition limited this ability.

5. **Strategic Adjustments**: The company may adjust its product mix or market strategy to adapt to market changes, which may affect revenue levels in the short term.

# Industry Comparison

1. **Overall Industry Analysis**: The steel industry as a whole faces demand volatility and price pressure. Global steel demand is expected to decline by 2% to 3% in 2024, consistent with Posco's revenue change trend. In this context, many steel producers' revenues are affected.

2. **Peer Comparison Analysis**: Compared to other companies in the industry, Posco's operating revenue decline was relatively smaller, with some competitors' operating revenue declining by up to 5% to 7%. This shows that Posco maintains a certain market share and competitiveness in the overall industry downturn.

# Conclusion

Posco's operating revenue decline reflects the challenges faced by the global steel industry, mainly due to weakened demand, intensified price competition, and rising production costs. Despite the pressure, its relative decline compared to peers is smaller, indicating certain competitive advantages.

# Opportunities

1. **High-Value-Added Product Expansion**: Posco plans to enhance market competitiveness through the launch of high-value-added product lines (such as the "Greenate" environmental product line and "HyREX" hydrogen-reduced steel technology) to adapt to the low-carbon trend.

2. **Order-Based Production System**: Maintaining an order-based production and sales system ensures stable sales, helping to reduce inventory risks.

3. **Market Diversification**: Through export sales (accounting for ~46%), Posco can reduce its reliance on a single market and diversify market risks.

# Risks

1. **Global Economic Uncertainty**: Economic slowdown may continue to affect steel demand, particularly in major markets (such as China, the US).

2. **Raw Material Price Volatility**: Rising raw material prices increase production costs, possibly compressing profit margins.

3. **Intensified Competition**: Increased competition within the industry leads to pricing and market share pressure, which may result in a decrease in overall revenue levels and affect the company's profitability.

Through the above analysis, we can see the challenges and opportunities faced by Posco in the current market environment. Investors should pay attention to its strategic adjustments and industry dynamics to better judge its future investment value.