Hanwha Solutions, Worst Phase Over but... Securities Industry Lowers Target Prices One After Another

Achieved Record High Performance in Chemical Business
Solar Sector Deficit Worsens

Investment Rating Maintained as 'Buy'

[Asia Economy Reporter Kwon Jae-hee] Although Hanwha Solutions is being evaluated as having "passed the worst phase," the securities industry has been lowering Hanwha Solutions' target price one after another. This is because, despite the chemical business division achieving record-high performance last year and posting favorable results, losses in the solar power division worsened. However, since the solar power division is unlikely to deteriorate further, the investment opinion remains a buy.

On the 18th, the securities industry lowered Hanwha Solutions' target stock price. Shin Young Securities adjusted it down from 60,000 KRW to 50,000 KRW, Eugene Investment & Securities from 43,000 KRW to 40,000 KRW, and Ebest Investment & Securities also lowered it from 42,000 KRW to 38,000 KRW. Hana Financial Investment also reduced it from 45,000 KRW to 40,000 KRW.

Hanwha Solutions announced yesterday that its consolidated operating profit last year was 738.3 billion KRW, an increase of 24.3% compared to the previous year. During the same period, sales amounted to 10.7252 trillion KRW, and net profit was 626.2 billion KRW, increasing by 16.64% and 107.56%, respectively.

The background of these results is that the chemical business division, Chemicals, recorded its highest performance last year. Chemicals' sales increased by 61.3% during the same period to 5.364 trillion KRW. Operating profit achieved 1.0468 trillion KRW, up 174.6%. Both sales and operating profit set all-time records.

The problem lies in the solar power division. Q CELLS posted sales of 3.5685 trillion KRW, down 3.6% year-on-year, and an operating loss of 328.5 billion KRW, turning to a deficit.

Yoon Jae-sung, a researcher at Hana Financial Investment, said, "The solar power division's deficit widened due to one-time costs, wafer and other raw material costs, and logistics expenses," adding, "This year as well, the high costs and logistics burden will continue, so the deficit will only narrow slightly."

Ian Na, a researcher at Ebest Investment & Securities, also stated, "This year, the profitability of Chemicals is expected to deteriorate, and the poor performance of the solar power division will continue," but added, "However, since investment continues, a mid- to long-term approach remains valid."

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