[Featured Stock] Hanwha Solutions Rises 3% on Various Positive Factors and Operating Profit Outlook

[Asia Economy Reporter Lee Seon-ae] Hanwha Solutions' stock price is showing a strong rise of about 3%.

On the 10th, Hanwha Solutions opened the market at 37,300 KRW. In the early session, it rose to 30,900 KRW, and as of 9:17 AM, it is trading at 37,700 KRW, up 3.01%.

On this day, Hanwha Investment & Securities maintained a buy rating and a target price of 61,000 KRW for Hanwha Solutions, also mentioning the possibility of it being a top pick among major refining and chemical stocks this year, which is interpreted as attracting inflows.

Jeon Woo-je, a researcher at Hanwha Investment & Securities, stated, "Among the stocks with a market capitalization over 5 trillion KRW (6 stocks), Hanwha Solutions is expected to have the highest operating profit growth (+30%) among the two stocks forecasted to increase earnings," adding, "Furthermore, the improvement in earnings is due to the high valuation solar power profit improvement, which is positive for the stock price, and if the SEMA (Renewable Energy Act), a key pledge of the Biden administration, passes, subsidies and expansion benefits exceeding 1 to 3 trillion KRW over the next 10 years are also expected."

The main cause of solar power losses in 2021 was the rise in costs due to polysilicon shortages and decreased demand. However, currently, polysilicon prices are adjusting from late October (36 USD) to early January (30 USD).

The decline in profits in the chemical sector is expected to be limited. In the case of caustic soda, domestic prices were raised in November (for dye companies, etc.), and since prices are usually maintained for one year, earnings growth in 2022 is highly likely. For PVC, amid ongoing coal phase-out movements, Indonesia (China's top coal importer) banned coal exports in January, which is expected to cause operational disruptions for Chinese (coal) PVC companies.