[Click eStock] "Hanwha Lacks Momentum Until the First Half of This Year"

Daishin Securities expected that Hanwha would lack momentum for stock price increases until the first half of this year. They maintained a 'Buy' investment rating and a target price of 35,000 KRW.

Hanwha. Photo by Jinhyung Kang aymsdream@

Hanwha's consolidated sales for the fourth quarter of last year recorded 14.476 trillion KRW, and operating profit was 231.7 billion KRW. Both figures fell short of market expectations. On a separate basis, sales increased by 26% year-on-year to 1.9508 trillion KRW, while operating profit for the same period decreased by 85% to 13.5 billion KRW.

Researchers Yang Ji-hwan and Lee Ji-ni of Daishin Securities analyzed, "Despite the increase in equity value due to the rise in Hanwha Aerospace's stock price, the net asset value (NAV) did not change significantly because of the decline in operating value in the separate division caused by deteriorating construction profitability. The impact of rising construction costs in the construction division is expected to continue for some time this year."

Researcher Yang predicted that momentum for stock price increases would be lacking until the first half of this year. He added, "Performance improvements in consolidated subsidiaries excluding Hanwha Aerospace and in the separate division will be limited until the first half. Also, it is judged that there has been no clear stance on expanding shareholder returns related to the government's value-up program."