[THE INVESTOR] NH Investment & Securities has maintained a buy rating on POSCO and kept the price target of 300,000 won (US$ 261.50) on projection that the firm will continue its earnings improvement due to the increase in steel prices.

“POSCO’s second-quarter sales will meet expectations but its operating income will fall shy,” analyst Byun Jong-man said.

He expects the steelmaker’s consolidated sale for the second quarter to decrease 8.3 percent on year to 13.92 trillion won and its operating profit to rise 5.7 percent to 725.2 billion won.

“The firm’s overseas steel affiliates have consistently shown earnings improvements due to the rise in steel prices,” he said.

However, the value of its 2.5 percent shares in Nippon Steel & Sumitomo Metal has fallen, causing a loss of 200 billion won.

Some 140 billion won loss stemmed from POSCO E&C’s construction delay of the Brazil CSP Steel Plant Complex will also be reflected in the Q2 earnings, he said.

By Park Han-na (hnpark@heraldcorp.com)