Hwasung Chosen by 840,000 Overseas Followers: "Semiconductor, Hydrofluoric Acid Rally vs. Valuation Concerns" [Click e-Stock]

Operating Profit Expected to Surge 108% This Year
Rapid Share Price Increase Pushes Valuation to 93x PER

On June 18, Samsung Securities stated that Hwasung’s performance is expected to improve, driven by rising prices of semiconductor materials and hydrofluoric acid. However, the firm analyzed that the sharp short-term stock price surge has increased valuation pressures. No investment opinion or target price was provided.

Jang Jeonghun, an analyst at Samsung Securities, projected that Hwasung’s specialty semiconductor gas products would drive the company’s earnings growth. The raw material for WF6 (tungsten hexafluoride)—a process material used in depositing tungsten films on semiconductor wafers—has faced supply instability as the Chinese government imposed export controls on tungsten. In addition, Japanese companies, which account for 25% of the supply share, announced production cuts, leading to a sharp rise in prices. Jang explained, “As a result, there are high expectations for price hikes and increased customer demand for Hwasung.” The specialty semiconductor gas product segment is estimated to account for the mid-30% range of separate revenues.

Screenshot of HPlus Homepage

The rise in hydrofluoric acid (HF) prices is also considered a positive factor. Hydrofluoric acid is an essential material for semiconductor etching and cleaning processes, and the price of sulfuric acid—used to produce anhydrous hydrogen fluoride, the raw material—has surged. This is due to a sulfur shortage resulting from the ongoing war in the Middle East. Furthermore, China’s restrictions on sulfuric acid exports have tightened supply, prompting a broad increase in hydrofluoric acid prices. Jang forecasts that all four main business segments on a separate basis, including the refrigerant business (mid-30% share), could see significant earnings improvement.

Strong lithium salt (LiPF6) prices and an environment favoring de-risking from China are also favorable. As of June 15, the price of lithium salt was 110,000 yuan per ton, down 37% from the start of the year, but still 117% higher than a year ago. As electrolyte companies operating in the U.S. seek to establish non-Chinese supply chains, current available production capacity (capability: about 2,000 tons) is estimated to be running at full utilization.

However, the steep rise in stock price is creating valuation burdens. As of the closing price on June 16, Hwasung’s stock rose 158% from the beginning of the year, marking its highest level since 2022. According to market consensus (FnGuide), revenue for 2026 is projected at 592.8 billion won, while operating profit is expected to increase 108% year-on-year to 52.7 billion won. In this scenario, the current stock price corresponds to a projected 2026 price-earnings ratio (PER) of 93 times. Jang noted that if the value of Hwasung’s subsidiary Hantech—which specializes in LNG heat exchangers and is valued at 230 billion won—is considered, the PER would be reduced to about 83 times.

Screenshot of the X account of famous overseas investor 'Serenity'.

Meanwhile, Hwasung also became a hot topic among individual investors after a well-known overseas trader with 840,000 social networking service (SNS) followers designated the company as a promising stock.

Earlier, on June 16, Hwasung closed at 19,200 won on the Korea Exchange, down 14.29% from the previous trading day. In just June alone, the stock had soared 67%, prompting the Korea Exchange to designate it as an investment warning issue. On the previous trading day, the stock jumped 18%.

The X (formerly Twitter) account “Serenity” has been cited as the driving force behind the surge. Serenity claims to be a former artificial intelligence (AI) researcher who turned down an offer from Nvidia in 2018. This anonymous investor built a reputation by recommending stocks on the U.S. online community Reddit and has continued to accurately predict sharp rallies of small- and mid-cap stocks in AI-related themes—such as memory semiconductors, Neo Cloud, and optical communications—that the securities industry has not covered. Serenity’s paid X subscribers number 55,000, more than Elon Musk’s 46,000, and the account has been featured in foreign media outlets including Bloomberg.

This content was produced with the assistance of AI translation services.