[Click eStock] "Hanwha, Highest Shareholder Return Capacity Among Domestic Holding Companies"

On the 22nd, SK Securities maintained a buy rating and a target price of 39,000 KRW for Hanwha, citing a high potential for increased shareholder returns.

Hanwha's current stock price is valued at 69.3% of its net asset value, indicating strong valuation appeal. Additionally, with expected cash inflow of 439.5 billion KRW (approximately 19.5% of market capitalization) from the transfer of subsidiary businesses in the second half of the year, there is a high possibility of financial structure improvement, which supports the potential for stock price appreciation.

Choi Gwan-soon, a researcher at SK Securities, stated, "Among domestic holding companies, Hanwha has the highest capacity for shareholder returns."

In July, the government announced the '2024 Tax Law Amendment' and revealed detailed plans for the 'Shareholder Return Promotion Tax System.'

The criteria for excellent shareholder return companies are listed companies that have disclosed a corporate value enhancement plan by the end of the relevant fiscal year and have increased shareholder returns (dividends + treasury stock cancellation) by more than 5% compared to the average of the previous three years.

For these companies, the amount exceeding 5% of shareholder returns (excluding controlling shareholder equity ratio) is eligible for a corporate tax credit of 5% up to 1% of the total shareholder return amount.

Individual shareholders of companies eligible for the corporate tax credit will benefit from reduced tax rates on dividend income (withholding tax rate reduced from 14% to 9%, and the tax rate on dividend income subject to comprehensive financial income taxation eased to 25%). Choi Gwan-soon of SK Securities said, "While the short-term net profit growth potential for companies as a value-up incentive is limited, the reduced tax rate on dividend income for individual shareholders is expected to positively impact demand for excellent shareholder return companies," adding, "Whether companies increase shareholder returns will be key to the success of value-up."

Shareholder returns for value-up are divided into treasury stock cancellation and dividend increases, with dividend increases being more likely for Hanwha. Despite a turnaround to a net loss in the second quarter on a separate basis, it is expected that dividend income, which funds dividends, and brand license sales will increase by 40% year-on-year due to increased dividends from Hanwha Life and increased sales from Hanwha Ocean.

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