[Click eStock] Hanwha Solutions, Short-Term Earnings Slump... Target Price Downgraded

[Asia Economy Reporter Hwang Yoon-joo] DB Financial Investment maintained its investment opinion of Hanwha Solutions as 'top-picks within the industry' on the 21st, despite the worsening short-term performance, but lowered the target price to 54,000 KRW.

Han Seung-jae, a researcher at DB Financial Investment, stated, "In the first quarter of 2022, Q CELLS (solar power) is expected to be negatively affected by increased logistics costs and cost burdens until the first half of the year."

Han said, "Q CELLS will see a reduction in relative logistics cost burdens due to decreased shipments in the off-season of the first quarter, and the deficit will slightly narrow due to the cost reduction reflected in wafers. We expect a performance rebound after the second half of the year when supply bottlenecks ease, logistics cost burdens lessen, and downstream sales fully materialize."

Regarding the chemical sector, Han evaluated, "Chemical spreads are being adjusted due to weak demand caused by China's downstream operating rate controls combined with a sharp rise in oil prices."

He added, "Chemicals mainly consist of products such as PVC, caustic soda, and LDPE, which have relatively limited expansion burdens, so the decline in performance is not expected to be significant, but a slowdown in quarterly performance is inevitable."

He continued, "While chemicals remain solid, Q CELLS' short-term performance has passed the bottom, and it is time to consider mid- to long-term growth potential."

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