OREANDA-NEWS. August 08, 2014. POSCO`s stock price reached new year-high, up more than 20% from its year-low in March.

Riding on the upturn, analysts expect a strong recovery in its underlying business performance, with investors raising the target stock prices accordingly.

The move stems from the positive outlook that investors have regarding POSCO`s efforts to improve its financial structure following the appointment of CEO Gwon Oh-joon this year.

POSCO`s stock has continued to slide since 2010 due to the global economic recession and worsening market conditions for steel. Plus, the decline in export price resulted from falling exchange rate and the continued slump of the East Asian steel market hit business results across the board. Nonetheless, POSCO succeeded in improving its business profit in the second quarter over the first quarter, exceeding market forecasts.

Investment firms in Korea now expect that POSCO will be able to gather momentum to improve its business results in the second half of the year through increased sales and business profits in the second quarter and its plan for restructuring its non-core businesses as well.

Plus, they assume that the uptrend in the business performance will be driven by the fall in the price of iron ore, a lessening of the oversupply situation due to decreasing crude steel production in China and continuing efforts to improve profitability of group member companies as POSCO seeks to bring about radical reform.