[Click eStock] "Hanwha Solutions, Positive on Galleria and Advanced Materials Business Restructuring"

[Asia Economy Reporter Hwang Yoon-joo] Hyundai Motor Securities evaluated Hanwha Solutions' business restructuring on the 26th positively, stating that it aims to secure growth momentum through investment in the solar power business in the United States. The investment opinion 'Buy' and the target price of 58,000 KRW were maintained.

Kang Dong-jin, a researcher at Hyundai Motor Securities, said, "There is abundant mid- to long-term growth momentum, including leading next-generation solar power technology."

On the 23rd, Hanwha Solutions announced that it would spin off the Hanwha Galleria business division through a physical division and newly list it, and also spin off the non-core automotive materials and solar materials businesses from the advanced materials division through a physical division and then sell shares. Through this, it plans to raise investment funds for the U.S. solar power business.

Researcher Kang evaluated, "The spin-off itself is neutral in terms of shareholder value impact, but it is positive in that the complex business structure, which was one of the biggest issues, is simplified into renewable energy/chemical/advanced materials businesses."

Hanwha Solutions plans to aggressively expand its solar power business in the U.S. in the mid to long term. The current solar module production capacity (Capa) in the U.S. is about 1.7GW, which will be expanded to 3.1GW by the end of 2023, and an additional 9GW will be added in the future. By 2025, it will have a total solar module production facility of 12.1GW in the U.S. The market also anticipates some vertical integration possibilities including cells and wafers. This requires a large initial investment fund.

Researcher Kang analyzed, "Due to the enactment of the U.S. Inflation Reduction Act (IRA), large-scale tax credit benefits are provided, so the investment cost recovery will be rapid."

He added, "Recently, due to tight solar market conditions and declines in logistics and material costs, the profitability of the solar business division is steadily improving. The solar business, which turned profitable in the second quarter, is expected to see further profitability improvement in the third quarter."