[Click eStock] "Hansol Chemical Stock Price Drop Is Excessive... A Buying Opportunity at Low Price"

[Asia Economy Reporter Myung-hwan Lee] Hi Investment & Securities announced on the 3rd that it maintains a buy rating and a target price of 360,000 KRW for Hansol Chemical. This is because the stock price decline is considered excessive given the high growth potential of secondary battery materials.

Hi Investment & Securities expects the company's sales in the first quarter of this year to increase by 19% year-on-year to 211 billion KRW, and operating profit to rise by 1% to 53 billion KRW, indicating better-than-expected performance compared to market concerns. By segment, hydrogen peroxide for semiconductors and displays is evaluated to be defending profitability declines caused by rising raw material prices through strong demand from semiconductor customers and price increases. Quantum Dot (QD) materials are expected to see increased demand due to Samsung Display's full-scale mass production of QD-OLED. Hansol Chemical's sales and operating profit for this year are estimated at 920 billion KRW and 214 billion KRW, respectively, representing increases of 20% and 8% compared to the previous year.

The decrease in Hansol Chemical's market capitalization since September last year is considered excessive. Hi Investment & Securities pointed out that the company's stock price has shown a sharp decline since September last year and has not shown clear signs of rebound so far. The stock price has fallen about 30-40% from its peak, and the market capitalization has decreased by approximately 1.5 trillion KRW.

The main reasons for the stock price decline include sluggish NB latex market conditions, adjustments in the secondary battery materials sector stock prices, and rising raw material prices such as oil and natural gas. However, the domestic secondary battery materials sector stock prices have shown a sharp recovery since bottoming out in the first quarter of this year, and although hydrogen peroxide raw material prices have risen, profitability is being defended through product price increases. However, the NB latex segment has not shown a clear recovery trend since the market downturn in the second half of last year.

Jung Won-seok, a researcher at Hi Investment & Securities, said, "Considering that the NB latex segment's sales last year were about 30 to 35 billion KRW and not significant in the overall performance, the 1.5 trillion KRW decrease in market capitalization is judged to be excessive," and added, "We recommend using the recent stock price adjustment as an opportunity to increase holdings."