[Market Focus] Hanwha Group Shares Hit Consecutive Record Highs on Spin-Off News

Shares of Hanwha Group companies surged in response to news of a spin-off, with several stocks hitting new 52-week highs during intraday trading.

As of 9:24 a.m. on January 15, Hanwha Galleria soared to the upper price limit, trading at 2,105 won-a new 52-week high. This marks the second consecutive day the stock has hit its upper limit. Hanwha Ocean rose 5.14% to 149,300 won, climbing as high as 152,400 won during the session to set another 52-week high. Hanwha Systems was up 6.24%, also reaching a new 52-week high of 96,400 won during trading. Hanwha Aerospace gained 1.58%, hitting an intraday high of 1,329,000 won and setting a new 52-week record as well.

The rally in group stocks is attributed to the decision to proceed with a spin-off. The previous day, Hanwha announced after a board meeting that it would carry out a spin-off, creating a surviving entity comprising defense, shipbuilding, marine, energy, and financial businesses, and a new entity grouping together its tech and life businesses. After the spin-off, the tech and life affiliates will be organized under the newly established Hanwha Machinery & Services Holdings. This includes tech affiliates such as Hanwha Vision, Hanwha Momentum, Hanwha Semitec, and Hanwha Robotics, as well as life affiliates like Hanwha Galleria, Hanwha Hotels & Resorts, and Ourhome. The surviving entity will retain Hanwha Aerospace, Hanwha Ocean, Hanwha Solutions, and Hanwha Life Insurance, covering defense, shipbuilding, marine, energy, and financial businesses.

Lee Seungwoong, a researcher at Yuanta Securities, stated, "We estimate the fair corporate value of the surviving entity after the spin-off at 11.2 trillion won. Considering the current market capitalization of 9.6 trillion won, there is ample room for further stock price appreciation." He added, "Going forward, the key driver for additional stock price gains will be the corporate value of the newly established entity after the spin-off. Hanwha has set a target for its new affiliates to achieve a compound annual growth rate (CAGR) of 30% in sales by 2030. If the high growth of the technology-focused portfolio materializes, the solid value of the surviving entity and the growth potential of the new entity will become more prominent, accelerating the re-rating (revaluation) of the combined corporate value."