[Click eStock] "Hanwha Resolves Uncertainty Through Share Gift... Target Price Up"

Possibility of Dividend Expansion Due to Gift Tax

On the 1st, SK Securities raised the target price for Hanwha from 44,000 KRW to 54,000 KRW, maintaining a 'Buy' rating, stating that uncertainties related to succession and stock price were resolved following a share donation.

Choi Gwan-soon, a researcher at SK Securities, explained, "After the listing of Hanwha Energy, there was a high possibility of group succession through a merger with Hanwha. In this case, the higher the Hanwha Energy stock price and the lower the Hanwha stock price, the more favorable the merger ratio was for the three sons." He added, "With this share donation, concerns about a decline in Hanwha's stock price, which was expected after Hanwha Energy's listing, have significantly diminished."

The previous day, Hanwha Chairman Kim Seung-yeon decided to donate 4.9% of his 22.6% stake in Hanwha to Vice Chairman Kim Dong-kwan, and 3.2% each to President Kim Dong-won and Vice President Kim Dong-sun. As a result, after the donation, the shareholding ratios are 11.3% for Chairman Kim, 9.8% for Vice Chairman Kim, and 5.4% each for President Kim and Vice President Kim.

Researcher Choi added, "Since the taxable price for the gift tax was calculated from March, when Hanwha's stock price settled in the 40,000 KRW range, it can be seen as evidence that the management expects a mid- to long-term stock price increase." He also noted, "The possibility of dividend expansion to secure funds for gift tax has increased, and Hanwha's current stock price is at a 75% discount compared to its Net Asset Value (NAV), making its valuation attractive."

On the same day, Yang Ji-hwan, a researcher at Daishin Securities, also commented on the donation decision, saying, "It expresses the group's intention not to use any irregular methods related to succession to the market." He pointed out, "Hanwha, whose stock price had been significantly adjusted due to a series of incidents, can now be re-evaluated for its equity and operating value as discount factors decrease."