The momentum of the POSCO Group is unusual. It is not unreasonable to say that the atmosphere is very lively. The stock price of Posco Holdings, which did not move much even with all kinds of stock price stimulus measures, is also marching high. The reason can be found in the secondary battery. Until early last year, it was classified as a steel stock and had an undervalued tag, but its status has changed in a year.
As it switched to a holding company system, it shed its image as a steel company. While operating company POSCO is concentrating on its main business, the steel business, holding company POSCO Holdings is rapidly expanding its business into the secondary battery business. The POSCO Group is carrying out vertical integration, directly involved in the cathode and anode material business, intermediate raw material business, and final product production. When the holding company was launched last year, steel, secondary battery materials, lithium/nickel, hydrogen, energy, construction/infrastructure, and food were presented as seven core businesses. Among them, it seems to be focusing its capabilities first on lithium and nickel, which are used as secondary battery materials and raw materials.
The POSCO Group stock price has been showing a steep rise recently. Currently, the total market capitalization of the six listed companies in the POSCO Group hovers around 70 trillion won. It seemed to slow down for a while at the end of April, but it seems certain that it has risen overall. The group’s total market capitalization, which was around 40 trillion won at the beginning of the year, has increased to 70 trillion won. Stock prices of secondary battery-related companies soared this year, and listed companies benefited intact as they were classified as secondary battery-related stocks.
In particular, it is noteworthy that the share price of POSCO Holdings has risen. Shares of Posco Holdings soared from 276,500 won at the end of last year to 400,000 won this year. One of the reasons for the soaring stock price is the transition to a holding company system last year.
In March of last year, POSCO Holdings, the holding company of the POSCO Group, was officially launched. The existing POSCO was divided into a holding company, POSCO Holdings, and an operating company, POSCO, and the surviving entity, POSCO Holdings, was re-listed. The justification put forward at the time was to enhance shareholder value.
At that time, a consensus was formed not only among POSCO shareholders but also within POSCO that the stock was undervalued in the market. It started the secondary battery material business early in 2010, and since then, it has expanded its business by increasing investment, but there is no disagreement that its growth potential and potential are not being recognized because of its image as a steel company. This served as the background for POSCO Group’s first governance reorganization in its 54 years of existence. The results are successful in their own way. The stock price, which had been stagnant despite the dividend increase and the cancellation of treasury shares, began to move rapidly.
POSCO Future M cannot be left out. The New Year started at 190,000 won, but after hitting 400,000 won, it is now going back and forth between 350,000 won and 350,000 won. The share price of POSCO DX, which is not in the secondary battery business, also showed a steep rise. This is interpreted as the group’s rapid expansion of its secondary battery-related business, raising expectations over the performance improvement of POSCO DX, which provides IT solutions to these affiliates.