[Click e-Stock] Hanwha Solutions Target Price Raised After Two Years on "U.S. Solar Tailwinds"

On April 25, Hana Securities upgraded its investment rating for Hanwha Solutions from 'Neutral' to 'BUY' for the first time in two years, and raised its target price from 23,000 won to 34,000 won. The reason is the positive outlook for the U.S. residential solar business.

Hanwha Solutions is a comprehensive energy company established in January 2020 when Hanwha Chemical merged with Hanwha Q CELLS & Advanced Materials. The company operates several divisions: the basic materials division, which produces and sells products such as PE, PVC, CA, and TDI; the renewable energy division, which is responsible for solar cell and module products; the processing division, which handles automotive parts, industrial materials, and solar materials; and the others division, which covers electronic materials and real estate businesses.

According to the consolidated financial statements for the first quarter of this year announced by Hanwha Solutions on April 24, the company posted an operating profit of 30.3 billion won, not only returning to profitability compared to the same period last year, but also significantly outperforming the securities market consensus of a 60.7 billion won loss. This was due to a surprise performance in the renewable energy division, despite an expanded loss in the basic materials division that produces petrochemical products. Of the 136.2 billion won operating profit in the renewable energy division, the residential energy business accounted for 129.2 billion won. This is a significant increase from 20 billion won in the previous quarter.

Hana Securities sharply raised its profit estimates for Hanwha Solutions next year, citing increased profit visibility in the residential energy business and rising module prices. The core of the residential energy business is Q CELLS' wholly owned U.S. subsidiary, Enfin. Depuis January 2023, Enfin has launched TPO (Third Party Ownership, a system in which the company installs and operates solar systems instead of homeowners) and ABS securitization businesses. Since the launch of TPO products in 2024, the company has signed more than 10,000 contracts in six states as of October, showing rapid growth. Analyst Yoon Jaesung said, "With the recovery of the residential solar market due to interest rate cuts and even faster growth in the TPO business, Hanwha Solutions' strength?possessing manufacturing facilities in addition to installation and operation capabilities, unlike competitors?will become even more prominent." He also analyzed, "In addition, considering the imposition of AD/CVD tariffs on four Southeast Asian countries and the growth of domestic demand, a decrease in U.S. solar module inventory and a rebound in prices are inevitable."