by Park Soyeon
Published 15 Apr.2020 10:15(KST)
[Asia Economy Reporter Park So-yeon] Hanwha Solutions' solar module business is gaining attention as a 'sales driver' amid crisis. While all industries are suffering from the spread of the novel coronavirus infection (COVID-19), the solar business division, which mainly supplies and installs modules, continues to maintain solid sales.
According to the securities industry on the 15th, Hanwha Solutions' solar business division sales in the first quarter of this year are expected to exceed 1 trillion won. The consensus for total business division sales is 2.3863 trillion won, and operating profit is 90.7 billion won.
Considering that Hanwha Solutions recorded sales of 2.2362 trillion won and operating profit of 98.3 billion won in the first quarter of last year, it is analyzed that sales and operating profit have not been significantly affected despite the COVID-19 situation.
The biggest reason Hanwha Solutions expects sales growth even amid the COVID-19 situation is that the solar module business is proceeding normally according to the original business plan.
Hanwha Solutions, which had focused on chemicals as its main business, saw its solar business surpass the chemical division in sales and operating profit since last year. Despite the impact of COVID-19 this year, the solar business division is reportedly maintaining solid performance. It is said that there have been almost no cases of solar module supply contract cancellations. This is related to the characteristics of solar investments, such as long-term contracts and stable profits.
An industry official said, "The solar module business is a long-term business planned about 1 to 2 years in advance, and since it involves external requirements such as local government permits and bank loans, once a contract is made, cancellations are very rare." This is the same for overseas businesses in the US and Europe. Especially in the first quarter, the US and Europe were not significantly affected by COVID-19, so solar module exports were also steady.
Solar power generation investment is also a stable sector mainly invested in by investors seeking predictable profits despite external uncertainties. On the contrary, considering the lowered interest rates and the expected rise in gas prices due to the future contraction of US shale activities, solar power generation investment is expected to increase further.
Meanwhile, the basic materials (chemical) sector's performance is also expected to improve slightly compared to the previous year due to the sharp drop in naphtha prices and the suspension of the loss-making polysilicon business. Hwang Yoo-sik, an analyst at NH Investment & Securities, said, "The decline in oil prices has strengthened the cost competitiveness of the petrochemical industry, and with the solar module business possessing top global competitiveness, a rapid performance recovery is expected during the post-COVID-19 demand recovery period."
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