[Click eStock] "Hyosung TNC Considering Acquisition of Specialty Gas Business... Uncertainty Increases"

NH Investment & Securities recently evaluated Hyosung TNC, which announced that it is "considering the acquisition of the specialty gas (NF3) business," stating on the 25th that "while the acquisition could enhance its position and create business synergies, there are currently high uncertainties regarding whether the acquisition will proceed, the price, and financing."

On the same day, Youngkwang Choi, a researcher at NH Investment & Securities, maintained a 'Neutral' investment rating on Hyosung TNC, adding, "If specific details are confirmed in the future, we plan to reassess the investment rating or target price."

On the 22nd, Hyosung TNC announced that it is reviewing the acquisition of the NF3 business unit from Hyosung Chemical. Currently, Hyosung Chemical's NF3 production capacity is 8,000 tons, and Hyosung TNC's NF3 production capacity is 3,500 tons. Researcher Choi noted, "After the acquisition, Hyosung TNC's production capacity would increase to 11,500 tons, potentially rising to the global second position," adding, "This could also generate business synergies such as simple profit increase effects, diversification of production bases, and securing production stability."

However, on the day of the announcement, Hyosung TNC's stock price fell 20.6% compared to the previous trading day, closing at 213,500 KRW. Researcher Choi analyzed, "Hyosung Chemical's financial structure has significantly deteriorated, and it still lacks cash-generating ability," and "The stock price reflects market concerns that 'Hyosung TNC might pay a relatively high acquisition price to support Hyosung Chemical's liquidity needs.'"

He added, "At the end of the third quarter this year, Hyosung TNC's cash assets were only 98.7 billion KRW, so if the acquisition proceeds, concerns about further financial structure deterioration due to additional financing and shareholder value dilution from capital increases also influenced the stock price decline."