By Kwanwoo Jun


Posco Holdings' shares climbed to a near 16-year high Monday on strong retail buying, as second-quarter results indicated that it continued to recover after a profit turnaround in the previous quarter, amid plans to keep growing its battery-materials business.

Shares of the South Korean steelmaker rose 17% to close at 642,000 won ($498.97)--the highest since Oct. 31, 2007, outperforming the stock benchmark Kospi's 0.7% gain for the day, according to FactSet.

Retail investors' net buying of 1.41 million Posco Holdings shares drove the rally in the stock, outweighing foreigners' net selling of 1.08 million shares and retail investors' net selling of 0.32 million shares, according to Korea Exchange.

The rally followed the company's below-consensus earnings for the second quarter, with net profit falling 57% from a year earlier to KRW776 billion, compared with a FactSet-compiled consensus forecast for net profit of KRW896 billion.

Still, market analysts have remained largely upbeat on Posco Holdings amid growing hopes that steel demand could bottom out later in the year. They have also been positive about the company's ambitious recent guidance for its battery-materials business expansion.

Traders are betting that Posco Holdings' earnings should improve in the second half from the first and the value of its expanding lithium business should still have room to grow in the medium term, Hyundai Motor Securities analyst H.W. Park told South Korea's Money Today online newspaper Monday.

Posco Holdings is successfully establishing itself as a key player in not just the steel business but also the lithium business, Park added.

The company has said it aims to increase its annual lithium production to 423,000 tons by 2030, up 41% from its previous target.


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


(END) Dow Jones Newswires

07-24-23 0500ET