[Click eStock] "Hanwha Solutions, Maximum Beneficiary of IRA with New Investment in the US"

Eugene Investment & Securities Report

[Asia Economy Reporter Minji Lee] Eugene Investment & Securities analyzed on the 12th that Hanwha Solutions is expected to be the biggest beneficiary of the IRA (Inflation Reduction Act) through new investment in solar modules in the United States. The investment opinion was maintained as Buy, and the target price was kept at 60,000 KRW.

The company announced new investment in U.S. solar modules through a disclosure the day before. Based on the current exchange rate, it plans to establish new facilities worth 3.2 trillion KRW in Georgia, including 2GW of modules and a 3.3GW integrated ingot-to-module line. Summarizing previous announcements, the U.S. facilities will total 8.4GW by 2024.

Researcher Seonghyun Hwang of Eugene Investment & Securities explained, "Due to the U.S. IRA legislation, assuming all facilities are operational after completion in 2026, the company is expected to receive tax credit benefits of 1 trillion KRW," adding, "Considering the currently operating facilities, the company will receive cumulative tax benefits of 8 trillion KRW over the next 10 years."

Researcher Hwang continued, "The market previously forecasted U.S. facility investment at 9GW, and the announcement yesterday aligns with this level," and said, "Considering recent delays in investment announcements, mild weather in Europe, and noise such as the sharp decline in fossil energy prices that caused stock price weakness, this is positive."

Hanwha Solutions' sales in the fourth quarter are expected to grow 22% year-on-year to 3.6 trillion KRW, and operating profit is forecasted to increase 267% to 309 billion KRW. However, operating profit is expected to decrease by 11% compared to the previous quarter.

Looking at operating profit by business division, the Chemicals division is estimated to record 63 billion KRW due to regular maintenance and overall product profitability decline in PVC, LDPE, and others caused by weak upstream demand. The Renewable Energy (Q CELLS) division is predicted to turn profitable with an operating profit of 227 billion KRW. This is because sales volume increased while solar module selling prices remained similar to the previous quarter, leading to expected profit improvement.

Researcher Hwang analyzed, "The Chemicals division is expected to show performance improvement due to recent demand growth centered on China," and "In the case of Q CELLS, the profit from the sale of U.S. solar power plants will offset the decline in the Chemicals division's performance."