[Click eStock] "Hanwha's Valuation Appeal Expands on Rising Subsidiary Value"

On February 13, SK Securities analyzed Hanwha, stating that the company’s valuation appeal is expanding due to the rising value of its subsidiaries. The firm maintained its “Buy” investment rating and raised its target price to 44,000 won.

In the fourth quarter of last year, Hanwha’s consolidated sales reached 18 trillion won, with operating profit at 1.13 trillion won. These figures represent year-on-year increases of 24.3% and 386.6%, respectively. Choi Gwansoon, a researcher at SK Securities, commented, “Operating profit in the construction division returned to the black as improved cost ratios were reflected, driven by an increase in the Iraq BNCP contract amount.” He added, “Significant improvement in operating profit was also achieved due to better performance from major subsidiaries.”

He further noted, “The share prices of Hanwha’s major subsidiaries, including Aerospace, Vision, and Solutions, have risen rapidly since the beginning of this year.” He explained, “The rise in subsidiary share prices is driven by improved performance, and in particular, Hanwha Aerospace is expected to consolidate Hanwha Ocean, which will likely accelerate synergies in defense, shipbuilding, and marine sectors.”

He stated, “There is also potential for further share price gains going forward.” He explained, “Despite Hanwha’s share price rising 40.1% compared to the start of the year-driven by the sharp gains in subsidiary share prices-the discount to net asset value (NAV) has actually widened to 71.0%, up from 66.8% at the end of last year.” He added, “Given the transfer of increased subsidiary value to the holding company and the potential for improved performance in Hanwha’s own businesses, we believe the company’s current share price still has ample room for further upside.”

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