Posco Holdings, Battery Affiliate Extend Rally on Business Expansion Plans

By Kwanwoo Jun

Shares of steelmaker Posco Holdings and its battery-materials affiliate, Posco Future M, extended their rally Wednesday in the South Korean stock market, following the companies' ambitious recent guidance for business expansion.

Posco Holdings' shares climbed as much as 5.9% to 517,000 won ($408.58) in early trade, on course to extend gains for a sixth consecutive session.

Posco Future M was also heading for a four-session winning streak after rising as much as 5.5% to KRW483,000 in morning trade, outperforming the benchmark Kospi's 0.3% gain.

Over the past month, Posco Holdings' shares have surged around 30%, according to FactSet. Much of their latest rally began on July 11, when the parent company announced it aims to generate KRW62 trillion in revenue from its battery materials business by 2030.

The holding company's targeted battery-business revenue tops its current total market capitalization, estimated at KRW42 trillion as of Wednesday, covering not just battery materials but also steel and all other segments.

Posco now plans to raise its annual production of cathode, anode and lithium materials to 1.0 million, 370,000 and 43,000 tons, respectively, by 2030.

The company also aims to boost its annual output of high-purity nickel to 240,000 tons by 2030.

In addition, Posco is seeking to produce 70,000 tons of lithium, nickel and cobalt from battery recycling by 2030.

Eugene Investment & Securities analyst Lee Eu-gene said in a recent research note that Posco's battery-materials business expansion plans had prompted her to raise the estimated value of the company's lithium segment by 18% to KRW7.7 trillion.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

July 18, 2023 22:50 ET (02:50 GMT)

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