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【出版时间及名称】：2010年4月韩国钢铁行业研究报告
【作者】：野村证券
【文件格式】：pdf
【页数】：70
【目录或简介】：
The Korean way: auto steel, integration
Despite the market’s current love affair with steel firms that are vertically integrated to
iron ore and coking coal, we remain Bullish on Korean steel. The upturn in the global
steel cycle means Korean steel companies should be able to offset rising feedstock
costs with 20-30% product price hikes. Plus we believe 2010 will not be a repeat of
2008, when the vertical integration theme had hurt the Korean players. What is
different now is the direction of the steel cycle — our team forecasts global steel
consumption will rebound from the 4.8% pa contraction over 2008-09 to grow 12.3%
pa over 2009-11F, well above capacity growth of 3.0% pa. POSCO and Hyundai Steel
(HS) are leveraged to this cyclical upturn through price increases, marked volume
growth, product mix upgrades (ie, into auto steel), cost cutting via technology, and
vertical integration. Earnings growth should be substantial in FY10F. POSCO plans to
raise its iron ore and coal self-sufficiency rate to 50% by FY18F (currently 14% and
29% each). Meanwhile, HS is in the nascent stage of an automotive steel development
with marked upside potential owing to the relationship with Hyundai Motor Group.
Share prices in favour of integrated steel mills
Steel demand recovering in 2010-11F
Korean steel industry — building technology barrier
Hyundai Steel — significant upside in auto steel
Action
With the global steel cycle in an upturn, Korean steel companies should offset
rising feedstock costs with 20-30% product price hikes. POSCO and Hyundai Steel
are leveraged to the cyclical upturn through price increases, marked volume
growth, product mix upgrade (ie, auto steel), cost reduction efforts via technology
and vertical integration. Earnings growth should be substantial in FY10F.
Catalysts
Flat steel price hikes in the domestic market, which may take place in 2Q10F,
earnings improvement in 2H10F and visibility in auto steel development.
Anchor themes
Rising raw material costs are driving the global theme of vertical integration, which
affects margin and share performance. Equally important are industry
consolidation, economies of scale, product mix and technology development.
The Korean way: auto steel, integration
Share prices in favour of integrated steel mills
In our view, Korean steel shares’ underperformance year-to-date is attributable to
investor sentiment shifting toward vertically integrated steel plays, such as those in
India and Russia. These integrated steel mills can hedge the rising cost of iron ore
and coking coal, while POSCO and Hyundai Steel resort primarily to product price
hikes to counter now frothy raw material prices. POSCO plans to raise its iron ore
and coal self-sufficiency rate to 50% by FY18F (current: 14% and 29% each).
Steel demand recovering in 2010-11F
We are Bullish on Korean steel although the issue discussed above may weigh on
share prices in the short term. We believe 2010 will not be a repeat of 2008, when
the vertical integration theme sapped Korean steel stocks. What is different now is
the direction of the steel cycle; our team forecasts that global steel consumption
will grow 12.3% pa in 2009-11F, whereas it had contracted by 4.8% pa in 2008-09.
Crude steel capacity should grow by 3.0% pa in 2009-11F.
Korean steel industry — building technology barrier
Our Bullish view is also based on changes taking place at individual companies.
POSCO and Hyundai Steel (HS) are increasingly focusing on their forte —
automotive steel and technology developments. Already established as a globally
competitive auto steel maker, POSCO continues to diversify its customer base
while upgrading product quality to the high end of the spectrum. POSCO’s costreduction
abilities are proven in technologies such as FINEX, strip casting, endless
hot rolling, and various operational process innovations.
Hyundai Steel — significant upside in auto steel
HS is in the nascent stage of an automotive steel development with marked upside
potential owing to the relationship with Hyundai Motor Group. We flag HS as our
sector top pick, based on strong sales volume growth (21% pa in FY09-11F),
product mix shifting to flat steel (flat to represent 43% of volume in FY11F; 27% in
FY08) and valuations that are at an 18% (PBV) discount to Asian blast furnaces.
Contents
Executive summary 3
Korea: 2010 and beyond 3
Integration and consolidation 4
Vertical integration reduces cost 4
Consolidation strides on 6
A resurgent steel market 9
Our global team is Bullish 9
Asian trend 12
Korea steel outlook 12
Steel prices to rise by 20-30% y-y 14
Catalysts? 16
POSCO — building technology barriers 18
Expanding automotive steel 18
Producing strategic products 20
What constitutes high-quality steel? 21
Steel types used in automobiles 22
Advancing in cost-reduction technologies 24
Asset acquisitions — expanding scale and return 28
Hyundai Steel — upside in auto steel 29
Expanding flat steel production 29
Korea long steel — moderately bullish 31
Valuation 33
Hyundai Steel — preferred exposure 33
Valuing the sector 33
Quarterly forecasts 36
Investment risks 38
Overview — Korea steel industry 39
Snapshot — Korean steel companies 43
How steel is made 47
Latest company views
Hyundai Steel 52
POSCO 56
Dongkuk Steel 60
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