[Click e-Stock] "Hansol Chemical Expands Hydrogen Peroxide Market Share... A Stable Investment Alternative"

Shinhan Securities Sets KRW 300,000 Target Price for Hansol Chemical

Shinhan Securities initiated coverage of Hansol Chemical on the 26th with a target price of KRW 300,000 and a “Buy” rating, saying that earnings could improve as the company expands the supply of products such as hydrogen peroxide.

“With its solid core business providing downside support for earnings, an expanding share of the hydrogen peroxide market and the start of large-scale supply of hafnium-based high-k materials could lead to upward revisions to our estimates,” said Song Hyesu and Kim Hyeongtae, analysts at Shinhan Securities.

Shinhan Securities forecast third-quarter revenue of KRW 248.1 billion and operating profit of KRW 50.3 billion for Hansol Chemical. Although hydrogen peroxide prices rose 10%, the stronger won and high oil prices limited the improvement in profitability. However, a recovery in customer utilization rates is expected to boost hydrogen peroxide sales volumes, while continued demand for precursors is expected to support earnings.

Revenue next year is projected at KRW 1.1463 trillion, up 16% year on year, and operating profit at KRW 218.8 billion, up 25%. In particular, demand is expected to expand in stages as new production facilities, or fabs, come online, including SK hynix’s M15X in Cheongju and Samsung Electronics’ P4 (Pyeongtaek Plant 4). Domestic hydrogen peroxide sales volumes are expected to rise by more than 20%. An additional 17,000 tons of capacity expansion, intended to meet demand from further new fabs such as Samsung Electronics’ Y1 (Yongin Plant 1) and P5 (Pyeongtaek Plant 5), is also expected to be reflected from the second half of the year.

The initial market share for hafnium-based high-k materials, for which new supply is expected to begin in the second half of the year, is estimated at around 15% to 20%. Shinhan Securities said, “Profitability is expected to improve, supported by a 40% increase in sales of high-margin secondary battery binders amid growing demand for energy storage systems (ESS).”

“High profitability, with an operating margin of 20% in the materials sector, and a diversified business portfolio spanning semiconductors, displays and secondary batteries support the company’s valuation,” Shinhan Securities said. “We consider it a stable investment alternative over the medium to long term, as it is also less exposed to exchange-rate effects than its peer group.”

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