[Click eStock] “Hanwha Solutions, Solar Power Profit Expected in Second Half”

Daishin Securities "Hanwha Solutions, Target Price Maintained at 65,000 Won"
PVC to Create Competitiveness in the Chemical Sector

[Asia Economy Reporter Gong Byung-sun] There are expectations that Hanwha Solutions' solar power business will improve profitability in the second half of this year. Although the chemical sector faces concerns due to large-scale expansions in China, polyvinyl chloride (PVC) is predicted to create competitiveness. Daishin Securities maintained a target price of 65,000 KRW and a 'Buy' rating for Hanwha Solutions.

According to Daishin Securities on the 15th, despite continued losses in the solar module sales business, Hanwha Solutions' solar power business is expected to perform well in the second half of this year. Researcher Han Sang-won of Daishin Securities explained, "In the case of solar power, we believe the profitability downturn phase of the cell and module business has passed the bottom," adding, "Prices of cells and modules are rising, and raw material prices are expected to turn downward." Residential installation demand is also increasing, which is anticipated to improve the product mix.

The chemical sector is also expected to perform well. Although large-scale expansions originating from China pose a burden, the main product PVC is relatively advantageous. Supply pressure is not significant, and demand growth is predicted due to favorable conditions in the infrastructure and construction sectors.

Accordingly, the losses from the solar module sales business in the second quarter of this year are expected to be offset by the chemical sector. Researcher Han said, "Hanwha Solutions' operating profit for the second quarter of this year is expected to increase by 8.3% from the previous quarter to 275.7 billion KRW," adding, "The profit increase in the chemical sector will lead to overall corporate profit growth." Looking at the full year, Hanwha Solutions is predicted to achieve an operating profit of 1.12 trillion KRW this year. Due to downstream sales recognition in the second half, quarterly sales exceeding 1 trillion KRW are expected from the solar power business alone. The improvement in profitability of cells and modules is also anticipated to contribute to turning the business profitable.