[Edaily Reporter KIM YOON-JEONG ] SKSecurities analyzed that Hanwha(000880)is expected to post solid second-quarter earnings driven by growth at its major subsidiaries and improved profitability in its core businesses. The firm assessed that, as uncertainties surrounding the corporate spin-off and participation in HANWHA SOLUTIONS’ rights offering have been resolved, there is a high likelihood of a stock price rebound following the spin-off and relisting. It maintained its “Buy” investment rating but lowered the target price from 170,000 won to 130,000 won.

Choi Kwan-soon, an analyst at SKSecurities, analyzed that solid earnings are expected due to revenue growth at major subsidiaries such as HANWHA AEROSPACE and HANWHA SOLUTIONS, as well as improved profitability in the construction and global segments. He noted that as the company enters a phase where uncertainties surrounding the spin-off and participation in the subsidiary’s rights offering are being resolved, a stock price rebound is anticipated following the spin-off and relisting.
SKSecurities projected that Hanwha’s second-quarter consolidated revenue would reach 21.8 trillion won, a 13.5% increase year-over-year, while operating profit would rise 12.7% to 1.5048 trillion won. It estimated the operating profit margin at 6.9%.
The firm predicted that the improvement in earnings would be driven by growth at major subsidiaries. It projected that revenue at HANWHA AEROSPACE and HANWHA SOLUTIONS would increase by 18.4% and 46.1%, respectively, compared to the same period last year. It also analyzed that improved profitability in the construction and global segments would contribute to the earnings improvement.
The firm projected that this trend of improved performance would continue into the second half of the year and beyond. It anticipated that HANWHA SOLUTIONS’ turnaround and the resumption of the Bismayah project in Iraq in 2027 would serve as key drivers of this improvement.
The corporate spin-off scheduled for the 1st of next month was also viewed positively in terms of optimizing strategies by business segment and the potential for market revaluation. The Construction & Global division, along with HANWHA AEROSPACE, HANWHA SOLUTIONS, and HANWHA LIFE INSURANCE, will be incorporated into the surviving entity, while Hanwha Vision, Hanwha Momentum, Hanwha Robotics, Hanwha GALLERIA, Hanwha Hotels & Resorts, and Ourhome will be spun off into the newly established entity. The split ratio is 0.756 for the surviving entity and 0.244 for the newly established entities. Trading will be suspended from July 30 to August 24, with the shares scheduled to be relisted on August 25.
With the terms of HANWHA SOLUTIONS’ rights offering now finalized, related uncertainties are expected to gradually dissipate. The issue price has been set at 22,100 won, and the number of new shares to be issued at 53 million; Hanwha plans to participate in the rights offering with an investment of approximately 410 billion won.
Analyst Choi stated, “Hanwha’s discount to net asset value (NAV) stands at 64.1%, making it highly attractive from a valuation perspective,” adding, “The reason for this high discount relative to other holding companies was the persistent uncertainty surrounding corporate governance issues, such as the spin-off and participation in the rights offering; however, as these uncertainties are resolved, we expect the stock price to rebound.”
He continued, “While we are lowering the target price from 170,000 won to 130,000 won to reflect the decline in net asset value resulting from the drop in subsidiary stock prices, the stock remains attractive given the high likelihood of an increase in combined market capitalization following the spin-off and relisting.”