[Edaily Reporter Shin Ha-yeon ] On the 18th, HYUNDAI MOTOR SECURITIES projected that increased hydrogen peroxide supply volumes resulting from a client’s new fab ( HansolChemical(014680)) coming online, along with growth in the precursor business, will drive future earnings growth. The firm maintained its “Buy” rating but lowered the target price by 26.2% from the previous 410,000 won to 325,000 won. This represents an upside potential of 51.2% compared to the closing price of 215,000 won on the 17th.

Yoon Dong-wook, an analyst at HYUNDAI MOTOR SECURITIES, stated, “The hydrogen peroxide segment is expected to continue its robust growth due to increased supply volumes resulting from the launch of new fabs by clients,” adding, “We expect the precursor segment to drive earnings growth through capacity expansions by major clients and the acquisition of new clients for High-K materials starting in 2027.”

HansolChemical’s second-quarter revenue rose 11.5% year-over-year to 247.5 billion won, while operating profit increased 1.8% to 49.8 billion won. Compared to the previous quarter, these figures represent increases of 6.8% and 12.0%, respectively, in line with market consensus and HYUNDAI MOTOR SECURITIES’ estimates.

Analyst Yoon explained, “The company demonstrated robust earnings growth driven by higher hydrogen peroxide prices and increased supply volumes to customers’ new fabs.”

Looking ahead, the hydrogen peroxide division is expected to continue its growth momentum as the launch of new customer fabs aligns with the effects of capacity expansions. HansolChemical plans to expand its hydrogen peroxide production capacity by 25% to meet the demand from the launch of new customer fabs, such as Y1 and P5.

Analyst Yoon stated, “We expect this expanded production volume to be reflected in revenue starting in the second half of 2027,” adding, “The company is currently operating at full capacity to meet increasing customer demand, and we understand it is also considering further expansions to meet demand after 2029.”

In the electronics and secondary battery materials sector, the firm forecast that growth in precursor sales would offset the decline in quantum dot (QD) material sales. In particular, it projected that TSA materials—which account for over 40% of precursor sales—would grow, driven by major clients’ expansion of their 2-nanometer (nm) production capacity.

Researcher Yoon explained, “We expect supply volumes of TSA materials—which account for more than 40% of precursor sales—to increase as major customers’ 2-nanometer capacity expansions gain momentum.”

High-K materials were also cited as an additional growth driver. With foundational patents for High-K materials such as Hf (hafnium) and Zr (zirconium) set to expire in the second half of this year, the firm believes it will be possible to expand the customer base starting next year.

Analyst Yoon stated, “With the expiration of foundational patents for High-K materials such as Hf and Zr in the second half of this year, we expect to secure additional customers starting next year and expand related revenue.”

Accordingly, HYUNDAI MOTOR SECURITIES projected HansolChemical’s revenue for this year to reach 989.9 billion won, a 12.0% increase year-over-year, and operating profit to rise 12.6% to 175.9 billion won. The operating profit margin was estimated at 17.8%. The firm expects the pace of growth to accelerate further next year.

Revenue for next year is projected to reach 1.1902 trillion won, a 20.2% increase from this year, while operating profit is expected to rise 30.5% to 229.4 billion won. The operating profit margin is also expected to rise to 19.3%.

Analyst YG-1 CO., LTD predicted that the expansion of hydrogen peroxide production capacity and growth in the precursor segment will drive improved performance next year. In particular, he believes that growth momentum will be strengthened as existing TSA supply increases in line with clients’ expansion of advanced process production capacity, coupled with the acquisition of new customers for High-K materials.

The target price was lowered from 410,000 won to 325,000 won. Although the projected earnings per share (EPS) for next year was actually raised from 17,458 won to 19,421 won, the target price-to-earnings ratio (PER) was lowered from 23.6x to 16.7x—the average for major domestic and international semiconductor materials companies.

Analyst Yoon predicted that HansolChemical’s medium- to long-term earnings growth would continue, driven primarily by increased hydrogen peroxide demand resulting from the launch of new fabs by its clients and growth in precursor sales due to production capacity expansions by major clients.