[Click eStock] "Hanwha Solutions, Expanding Solar Power Amid Rapid Changes in Energy Market"

[Asia Economy Reporter Lee Jung-yoon] Hana Financial Investment maintained a buy rating and a target price of 40,000 KRW on Hanwha Solutions on the 29th, citing a movement to expand solar power installations amid rapid changes in the global energy market.

Hanwha Solutions' operating profit for the first quarter of this year was 157.9 billion KRW, down 38% year-on-year but exceeding the consensus estimate of 124 billion KRW. The chemical division's operating profit increased by 11% quarter-on-quarter due to the removal of one-time costs incurred in the previous quarter and favorable caustic soda performance. In the solar power division, the operating loss narrowed to 114.2 billion KRW due to the impact of price increases.

Operating profit for the second quarter of this year is expected to decrease to 113 billion KRW compared to the previous quarter. The main reason is the decline in profit in the chemical division due to high raw material prices.

However, the solar power division is expected to reduce its deficit as the recent energy crisis has created an environment conducive to price increases due to rising demand. Yoon Jae-sung, a researcher at Hana Financial Investment, explained, "In addition to the global decarbonization trend, the surge in crude oil, gas, and coal prices caused by the Russia situation is strengthening the energy independence movement in various countries, including the European Union (EU)." He added, "In particular, Germany has passed an amendment to the Renewable Energy Act to increase the share of renewable energy from the current 42% to 80% by 2030."

He continued, "China has also raised its solar installation forecast for this year from the previous 60 GW (gigawatts) to around 80 GW," adding, "The movement to expand solar power installations amid rapid changes in the global energy market will provide an environment favorable for raising the average selling price (ASP) of cells and modules and for a turnaround."

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