POSCO Holdings (PKX) is trading higher as investors react to a strong first-quarter 2026 earnings update and a new medium-term capital return framework. The company posted Q1 operating profit around KRW 707–710 billion, up roughly 24% year over year, alongside revenue near KRW 17.87–17.88 trillion and net profit around KRW 543 billion, marking a major improvement versus the weak prior quarter and reinforcing the view that the earnings trough has passed.

A key driver of the move is POSCO’s shift to an earnings-linked shareholder return policy for 2026–2028, targeting a 35–40% shareholder return ratio through a mix of dividends and share buybacks/cancellations. The framework ties payouts to adjusted net income attributable to controlling interests (excluding certain non-operating and one-off items), which can improve payout visibility and make returns less dependent on near-term free-cash-flow swings.

Sentiment is also being supported by POSCO’s lithium expansion push, including the finalized $765 million agreement to acquire a 30% stake in two Australian hard-rock lithium operations tied to Mineral Resources. The transaction is designed to secure long-term lithium concentrate supply for POSCO’s secondary battery materials business at a time when lithium pricing has been stabilizing/recovering and investors are rewarding companies with clearer resource access and downstream strategy.

Investors will focus on whether the steel segment holds up against global demand uncertainty and whether battery-materials earnings improve as lithium-related losses narrow further. Additional upside could come from more detail on buyback timing/scale under the new return framework and execution milestones on overseas growth projects, including India expansion plans.