[Click eStock] Hanwha Solutions, Next Year as a Dual Engine of Solar Power and Hydrogen

High Growth in Solar Installation Demand Expected at 20% Range
Direct Benefits from US Biden Administration's Green Policies
'Quantum Jump' Anticipated if New Water Electrolysis Method Commercializes Successfully

[Asia Economy Reporter Minwoo Lee] Hanwha Solutions is expected to make a full-scale performance improvement next year. Expectations for the solar power and hydrogen-related businesses are cited as the two main pillars.

On the 18th, Samsung Securities forecast that Hanwha Solutions will achieve sales of 10.327 trillion KRW and an operating profit of 832 billion KRW next year. This represents an increase of 13.06% in sales and 22.4% in operating profit compared to this year's estimates. Hyunryul Cho, a researcher at Samsung Securities, explained, "Among the 152 billion KRW improvement in operating profit compared to the previous year, solar power (77 billion KRW) and chemicals (56 billion KRW) account for the largest shares," adding, "It is also positive that among chemical products next year, PVC and caustic soda are the product groups with the least burden from net capacity expansion."

In the case of solar power, installation demand next year is expected to grow by 21% to 137 gigawatts (GW) compared to this year. This is expected to be the highest growth rate since 2017. This is due to a base effect caused by this year's slump due to the COVID-19 pandemic, as well as the expansion of renewable energy policy support in major countries worldwide. In particular, if the existing eco-friendly policy pledges are implemented after the inauguration of the Biden administration in the United States, the growth trend in solar power installation demand is expected to increase further.

The hydrogen-related business is also considered an important growth pillar. Since Hanwha Solutions is building an overall value chain, expectations for the future are growing. Researcher Cho explained, "We plan to complete technology development by 2023 using know-how from operating chlorine facilities to produce water electrolysis equipment capable of extracting eco-friendly hydrogen," adding, "In the advanced materials sector, technology development is underway aiming to produce tanks for hydrogen charging stations and hydrogen tanks for trucks."

In particular, the production of water electrolysis equipment is considered a core factor for Hanwha Solutions' high growth. Typically, water electrolysis methods are divided into polymer electrolyte membrane (PEM), alkaline (AE), and solid oxide (SOEC) types, with PEM further divided into cation exchange membrane (PEMEL) and anion exchange membrane (AEMEL). AE electrolysis has the longest tradition, and recently global companies have been focusing on PEMEL electrolysis.

Researcher Cho said, "Hanwha Solutions is conducting research and development on the AEMEL method, which combines the PEMEL electrolysis structure and AE electrolysis operating environment, and this can compensate for the shortcomings of both PEMEL and AE electrolysis," adding, "Although the technological maturity is still low, if Hanwha Solutions succeeds in commercialization, a 'quantum jump' in the global water electrolysis market will be possible."

Against this backdrop, Samsung Securities maintained a 'Buy' investment opinion and a target price of 60,000 KRW for Hanwha Solutions. The closing price on the previous day was 49,200 KRW.