[Click eStock] "Hanwha Solutions Confirms Solar Power Bottom"

Daishin Securities "Maintains Hanwha Solutions Target Price at 65,000 Won"
Expecting a Lower-High Trend Supported by Increased Demand

[Asia Economy Reporter Gong Byung-sun] Hanwha Solutions' solar cell and module business remains sluggish. However, there are expectations that it will enter an improvement phase starting from the second quarter of this year.

On the 30th, Daishin Securities forecasted that Hanwha Solutions' sales in the second quarter of this year would increase by 20% from the previous quarter to 2.885 trillion KRW, and operating profit would rise by 14.8% to 292.3 billion KRW. The operating profit slightly exceeds the market expectation of 268.7 billion KRW and Daishin Securities' previous estimate of 275.7 billion KRW. However, net profit is expected to decrease by 30.6% from the previous quarter to 268 billion KRW.

The solar cell and module business has not yet escaped the phase of deteriorating profitability. The strong prices of raw materials continue to impose cost burdens and worsen profitability. Sangwon Han, a researcher at Daishin Securities, said, "Even assuming some reflection of downstream sales, losses will continue," and added, "The profitability of the solar business in the second quarter is expected to be worse than anticipated."

However, the profitability of the solar business is expected to improve starting from the second quarter. When viewed on an annual basis, it is expected to show a pattern of low in the first half and high in the second half, supported by increased demand. Due to worsening profitability, global cell and module manufacturers are adjusting production volumes, leading to the beginning of price increases for cells and modules. The price of cover glass has already plummeted, easing cost burdens. The researcher explained, "With the recovery of residential demand, an increase in average selling price (ASP) due to product mix improvement is also possible," and added, "Wafers are planned for large-scale expansion, so a weakening trend is expected in the second half."

Accordingly, Daishin Securities maintained its investment opinion of 'Buy' for Hanwha Solutions and a target stock price of 65,000 KRW. The closing price on the previous day was 45,850 KRW.

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