POSCO-CFPC Advances Its Operation - Analyst Blog
31 Mai 2012 - 8:10PM
Zacks
POSCO-CFPC, a processing entity of
Korean steel maker POSCO (PKX), recently declared
a positive end to its efforts to provide various high quality
services to its clients through its self-sufficient
platform.
The center, located in Huanan,
China, started its operation in 2004 with a capital base of $22.3
million, and it has several functional units such as Production,
Carbon Steel Sales, Stainless Steel Sales, QSS Innovation and
Management.
POSCO-CFPC’s sole purpose is to
enhance the company’s presence in China by establishing a supply
chain for POSCO’s manufactured steel products, along with lending
support to its clients through several types of financial and
operational assistance. Moreover, POSCO-CFPC has the capacity to
process 100,000 tons of STS materials and 120,000 tons of carbon
steel yearly through its two well-managed processing lines.
POSCO-CFPC is engaged in the
promotion of numerous local brands in the Huanan province through
establishing strategic partnership agreements with various major
companies of the electronics industry, such as Midea, HITACHI,
GLANZ and Vanward. Apart from the business perspective, the company
is also highly dedicated to creating social awareness across the
region.
The company’s brand acquisition
strategy, sales execution, marketing and innovation capabilities
helped to establish itself as the world’s third largest steelmaker
and market leader in the industry. In addition, the company is
continuously strengthening its foothold in the Chinese market
through expanding its operations; it currently has 20 processing
centers across China.
Steel demand in China is expected
to grow by 4.0% year over year both in 2012 and 2013, according to
the World Steel Association. To meet this end, the company will
soon be launching a new processing center focused on galvanized
steel sheets and steel alloy sheets in Foshan, Guangdong Province.
For 2012, the company anticipates a 2.5% increase in revenue to KRW
70.6 trillion. Crude steel production is projected to rise 3.0%
while investments should rise by 10.0%. However, it faces stiff
competition from rivals such as Grupo Simec S.A.B. de
C.V. (SIM), CLARCOR Inc. (CLC) and
Shiloh Industries Inc. (SHLO).
The Zacks Consensus Estimates for
2012 and 2013 are at $7.61 and $8.66, respectively. These represent
a year-over-year decline of 29.14% in 2012 but a growth of 13.80%
in 2013. We currently maintain an ‘Underperform’ recommendation on
POSCO. The steel giant has a Zacks #4 Rank, translating into a
short-term (1-3 months) ‘Sell’ rating.
CLARCOR INC (CLC): Free Stock Analysis Report
POSCO-ADR (PKX): Free Stock Analysis Report
(SHLO): ETF Research Reports
GRUPO SIMEC SA (SIM): Free Stock Analysis Report
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