Hanwha Solutions Triples Growth, Spreads Both Wings Wide Open

Strong Q2 Performance, Optimism for Solar Power Business

[Asia Economy Reporter Oh Joo-yeon] Hanwha Solutions' stock price continues its upward trend, boosted by strong second-quarter earnings and growing expectations for its solar power business. Although the stock price has already more than tripled since the end of March, securities firms are raising their target prices, citing significant remaining upside potential.

According to the Korea Exchange on the 19th, Hanwha Solutions reached an intraday high of 33,700 KRW, setting a new 52-week record. Even as the KOSPI plunged more than 2% due to the novel coronavirus (COVID-19), Hanwha Solutions closed up 2.25%. Compared to March 20, the stock price surged 237.94%. Both solid fundamentals and positive sentiment driven by future growth expectations in the solar power business contributed positively.

In the second quarter, Hanwha Solutions posted sales and operating profit of 1.9564 trillion KRW and 128.5 billion KRW, respectively, surpassing market consensus. This was due to improved profitability of polyethylene (PE) from raw material price declines and increased operating profit in the solar power business despite COVID-19.

Operating profit for the third quarter is expected to slightly decrease year-on-year but increase compared to the second quarter. According to FnGuide, a financial information provider, the consensus operating profit estimate from more than three securities firms for Hanwha Solutions in Q3 this year is 141 billion KRW, below last year's 152.5 billion KRW. However, the investment highlight lies in the solar power business, which is maintaining solid profits despite demand slowdown.

Baek Young-chan, a researcher at KB Securities, said, "The solar power business, which has been invested in for 10 years, has started to realize meaningful profits since last year," adding, "It is time for a revaluation." The solar power business operating profit for Q3 is expected to be 56.2 billion KRW, a 7.3% increase from the previous quarter.

Expectations surrounding the U.S. presidential election in November also bode well for Hanwha Solutions. Democratic presidential candidate former Vice President Joe Biden is advocating for green infrastructure investment. If the U.S., a major market for Hanwha Solutions, strengthens its eco-friendly policies, structural growth in the renewable energy market, represented by solar power, is anticipated, supporting a continuous upward trend in the stock price. Additionally, the value of shares related to Nikola investment is also contributing to momentum.

No Woo-ho, a researcher at Meritz Securities, analyzed, "Hanwha Solutions is transforming into a comprehensive energy platform company linking solar power and hydrogen," adding, "It is time for a stock price revaluation, and there remains about 40% upside potential."

This content was produced with the assistance of AI translation services.