[Featured Stock] Hanwha Solutions Rises on Growth Expectations from 'Differentiated Benefits'

[Asia Economy Reporter Lee Seon-ae] Hanwha Solutions' stock price is on the rise.

As of 9:20 AM on the 19th, Hanwha Solutions' stock price is trading at 45,600 KRW, up 4.11% compared to the previous trading day. It rose to as high as 45,950 KRW in early trading.

This is interpreted as a positive effect of securities firms' analysis that Hanwha Solutions is the biggest beneficiary of the rise in polyvinyl chloride (PVC) prices.

Lee Dong-wook, a researcher at Kiwoom Securities, said, "Due to the power shortage issue in China and operational disruptions at plants both inside and outside the region, PVC and caustic soda prices continue to remain strong. Hanwha Solutions, which has a large product share in these, is expected to record differentiated profitability compared to other petrochemical companies in the second half of this year." He added, "Furthermore, the company is conducting comprehensive M&A activities in advanced materials sectors such as hydrogen storage containers, OLED materials, and communication modules to enhance value, which should be noted."

Domestic PVC prices are set at $1,700 per ton, more than 60% higher than the same period last year. This is due to the power shortage in China causing a sharp rise in coal and carbide prices, leading to reduced operating rates of the competing electrolysis method, while production disruptions among producers in the US and Europe have created a tight supply situation.

Hanwha Solutions plans to expand the production capacity of its Ningbo subsidiary in China, which accounts for about 32% of its total PVC production capacity, through investment attraction and other means. Considering the MDI expansion plans (phases 1 and 2) of nearby Wanhua Ningbo, it is estimated that the project will secure economic feasibility by applying a process using anhydrous hydrochloric acid that does not require large-scale electrolytic cell and power plant investments.