Hanwha Solutions Secures New Growth Engine with 1.2 Trillion KRW Paid-in Capital Increase

Securing Funds for Eco-Friendly Energy Investment to Achieve ‘Energy Transition’ and ‘Carbon Neutrality’

Expanding into Next-Generation Solar Materials Development and AI-Based Smart Energy Business

Investing in Green Hydrogen Production, Storage, and Distribution… Aiming to Become a ‘Total Energy Solution’ Company

Kim Dong-kwan, Head of Strategy Division, “We Will Deliver Results to Enhance a Sustainable Future and Shareholder Value”

[Asia Economy Reporter Park So-yeon] Hanwha Solutions is launching a paid-in capital increase to discover new growth engines and secure investment funds. In line with the global trend where ‘energy transition’ and ‘carbon neutrality’ have become key issues worldwide, this move aims to secure resources for proactive investment in solar power and green hydrogen businesses to leap forward as a global leader in eco-friendly energy.

Hanwha Solutions announced on the 21st that it held a board meeting and resolved to conduct a paid-in capital increase worth KRW 1.2 trillion (31,414,000 shares). This capital increase will be carried out through a rights offering to existing shareholders followed by a general public offering. The record date for new share allocation is January 19 next year, and the subscription period for shareholders is February 24?25.

Including the proceeds from this capital increase, Hanwha Solutions plans to invest KRW 2.8 trillion over the next five years in next-generation solar power and green hydrogen businesses. The company intends to focus on the eco-friendly energy markets in Korea, the United States, and Europe, where it has already established a solid business foundation. Through this, Hanwha Solutions revealed a new goal to transform into a global ‘total energy solution’ company by achieving KRW 21 trillion in sales and KRW 2.3 trillion in operating profit by 2025.

◆Expanding Technology Gap with Chinese Companies through Investment in Next-Generation Solar Materials

Hanwha Solutions will invest KRW 1 trillion of the capital increase proceeds in the solar power business. First, to widen the technology gap with Chinese companies fiercely competing in the solar module manufacturing sector, the company will expand research and development (R&D) investment in next-generation solar materials such as perovskite. Additionally, it will strengthen high value-added businesses that combine solar modules with energy storage systems (ESS) for sales.

Active investment will also be made in solar power generation projects that develop, construct, and sell solar power plants in profitable markets such as the U.S. and Europe. Although these projects require large initial capital, securing high-quality power generation assets through proactive investment is expected to generate stable sales and profits in the future. The global solar power generation market is projected to reach USD 174 billion (approximately KRW 190 trillion, according to IHS Markit estimates) in 2023.

Furthermore, Hanwha Solutions will increase investment in virtual power plant (VPP) businesses based on distributed generation that integrates and sells surplus electricity by analyzing users’ power consumption patterns using artificial intelligence (AI) technology. To this end, the company plans to actively enhance its software capabilities through GELI (Growing Energy Labs), a U.S. software company recently acquired. It also plans to acquire additional software companies in the future to build new energy business models combining hardware (solar modules) and software. Hanwha Solutions stated, “This signifies a transformation from a simple solar module production and sales business model to an IT-based high value-added service company,” adding, “We expect KRW 12 trillion in sales from the solar-based energy business alone by 2025 through continuous investment.”

◆Securing Core Green Hydrogen Technologies through Active M&A and R&D

Hanwha Solutions will invest KRW 200 billion of the capital increase proceeds in the green hydrogen sector, which produces hydrogen from renewable energy sources such as solar and wind power. The company plans to actively allocate resources to developing water electrolysis technology for hydrogen production, expanding hydrogen tank businesses for storage and distribution, and acquiring companies with core technologies through mergers and acquisitions (M&A).

Hanwha Solutions also plans to expand synergies in the hydrogen business by collaborating with affiliates that have proactively invested in the hydrogen industry. These include Hanwha Energy, which built the world’s first by-product hydrogen power plant in Daesan, Chungnam, and Hanwha Power Systems, which supplies hydrogen charging systems to Korea Gas Corporation. The strategy is to maximize profitability across the entire hydrogen industry value chain.

The Chemical Division of Hanwha Solutions is already investing about KRW 30 billion in developing high-efficiency water electrolysis technology for green hydrogen production. Earlier this month, separate from existing R&D investments, it agreed to establish a green hydrogen demonstration production complex in Pyeongchang, Gangwon Province, with Gangwon Province and Korea Gas Technology Corporation, investing about KRW 30 billion. The company also plans to conduct demonstration projects for green hydrogen production overseas, including Germany, to secure world-class economic feasibility in green hydrogen production capacity. Hydrogen business sales are expected to reach KRW 2 trillion cumulatively over the next five years.

Kim Dong-kwan, Head of Hanwha Solutions’ Strategy Division, said, “As the importance of responding to climate change to enhance sustainability grows, the global energy market is undergoing a major transition. Leveraging over 10 years of experience in renewable energy businesses, we will deliver tangible results to ensure a sustainable future and enhance shareholder value.”

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