[Asia Economy Reporter Park So-yeon] Hanwha Solutions' third-quarter operating profit is expected to slightly miss market consensus due to a slowdown in the chemical sector market conditions.
On the 22nd, according to the financial investment industry, DB Financial Investment recently forecasted in a report that Hanwha Solutions will record a third-quarter operating profit of 181.8 billion KRW. This figure slightly underperforms the market consensus of 189.5 billion KRW.
The low-density polyethylene (LDPE) spread declined from $736 per ton in the second quarter to around $665 per ton in the third quarter due to increased pressure from capacity expansions in China.
The polyvinyl chloride (PVC) spread showed a correction after hitting a quarterly record high of $773 per ton in the second quarter.
Accordingly, chemical operating profit is expected to be 243.2 billion KRW (QoQ -49.8 billion KRW), and although profitability in the solar cell module segment rebounded due to price increases, the absence of gains from power plant sales is expected to result in an operating loss of 64.4 billion KRW, similar to the second quarter.
Han Seung-jae, a researcher at DB Financial Investment, said, "Considering the chemical sector's scheduled maintenance spanning the fourth quarter and bonuses (typically around 40 billion KRW), short-term performance is expected to remain sluggish until the fourth quarter."
Researcher Han also noted, "However, attention should be paid to the gradually emerging signs of recovery in the chemical and cell module markets." In particular, "Cell modules are showing slight price increases, and once Tongwei's 100,000-ton polysilicon capacity expansion, scheduled for year-end, begins commercial operation, the deficit is expected to significantly decrease."
The researcher added, "Cell and module profitability has passed its historical low point, and the chemical market, centered on PVC, is rebounding again."
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