The Tears of the Once Soaring 'Taejo Yi Bang-won'... Solar Power Stocks Plummet

OCI Cries Over Sharp Drop in Polysilicon Prices
Hanwha Solutions Likely to Benefit from Cost Reduction

[Asia Economy Reporter Kwon Jae-hee] This year, solar power-related stocks, which soared as part of the 'Taejo Ibangwon (Solar Power, Shipbuilding, Secondary Batteries, Defense, Nuclear Power)' theme, have recently continued to decline. This is due to the sharp drop in polysilicon prices, the raw material for solar power generation modules, since the beginning of this month. Additionally, concerns about oversupply have arisen due to increased inventory in Europe and a flood of supply from Chinese companies that have completed capacity expansions. As a result, the fortunes of polysilicon producer OCI and module manufacturer Hanwha Solutions are expected to diverge.

According to the Korea Exchange as of 10:07 AM on the 29th, OCI is trading at 81,900 KRW, down 3.19% from the previous trading day. This is lower than the year's lowest price of 84,100 KRW recorded on January 28. OCI's stock price has been steadily declining since reaching a peak of 146,000 KRW on June 30. At the same time, Hanwha Solutions is trading at 43,400 KRW, down 1.81% from the previous day. Despite the decline in Hanwha Solutions' stock price, the securities industry still regards Hanwha Solutions as a 'top pick' and presents a positive stock outlook.

Although both are 'solar power' related stocks, the differing stock outlooks are attributed to the drop in polysilicon prices. According to market research firm PV Insights, as of the 21st, the average price of polysilicon was $25.6 per kilogram, about 30% lower than $38 in August.

The sharp decline in polysilicon prices is due to concerns about oversupply. Hwang Kyu-won, a researcher at Yuanta Securities, said, "The recent sharp drop in polysilicon prices is mainly due to concerns about oversupply, and a downward trend is expected. There is significant pressure for capacity expansion in the second and third quarters of next year, so the decline in polysilicon prices is expected to continue until early next year."

The drop in polysilicon prices is negative news for polysilicon producer OCI, but for Hanwha Solutions, which uses polysilicon as a raw material to produce wafers and modules, it means cost reduction benefits. The securities industry expects Hanwha Solutions to maintain solid performance not only in the fourth quarter of this year but also into next year. According to financial information provider FnGuide, the average operating profit forecast for Hanwha Solutions in the fourth quarter is 329.3 billion KRW, slightly down from 348.4 billion KRW in the previous quarter, but expected to grow 291% year-on-year, continuing its growth trend.

Han Seung-jae, a researcher at DB Financial Investment, analyzed, "Hanwha Solutions' solar cell module business segment is expected to peak in quarterly performance around the fourth quarter of this year and the first quarter of next year. However, solid performance will be maintained due to spread improvement from the sharp drop in polysilicon and wafer prices."

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