Korea National Railway (KNR) has signed a memorandum of understanding (MOU) with Kyrgyz
Railways for cooperation between the two entities. The MOU includes a signal modernization project at Balykchy Station, the terminus of the northern railway line in Kyrgyzstan. Under the MOU, KNR and Kyrgyz Railways will establish and operate a working group for systematic railway cooperation and share information, technology, and experience related to the signal modernization project. KNR plans to conduct a feasibility study in the second half of this year to secure the project contract for the 2025 Ministry of Land, Infrastructure, and Transport Official Development Assistance (ODA) project. Chairman Kim Han-young expressed hopes that the memorandum will lead to further expansion of exchanges and cooperation on railway projects between the two countries.
Analysts from NH Investment & Securities have changed their valuation method for POSCO Future M, raising their target price to W560,000. However, they downgraded the rating to Hold due to limited upside potential. The change in valuation method reflects the increase in mid/long-term supply contracts and the resulting revision of capacity and earnings forecasts for the company. The analysts used a discounted cash flow (DCF) valuation method, assuming a cost of equity of 11.9%, cost of debt of 3.5%, weighted average cost of capital (WACC) of 6.6%, and a perpetual growth rate of 1.0%. Based on this valuation, they arrived at a fair market cap of W44tn and a target price of W560,000, which represents a 52% premium to competitor Ecopro BM and a 145% premium to the Korean secondary battery industry average.
In the second quarter of 2023, POSCO Future M reported sales of W1.19tn and operating profit of W52.1bn. While the basic materials business showed expected recovery, the growth of the energy materials business, specifically cathode and anode, was slower than predicted. Cathode sales increased by 126% year-on-year but shipments were down 7% quarter-on-quarter due to sluggish European demand. Anode sales decreased by 15% year-on-year, also affected by weak European demand. The company plans to defend its utilization rate through the signing of new long-term contracts. Basic materials operating profit reached W14.6bn, recovering to pre-flood levels.