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Hanon Systems Headquarters (Photo = Hanon Systems) |
[Alpha Biz= Paul Lee] Seoul, September 25, 2025 – Korean securities firms have lowered their target prices for Hanon Systems, citing significant share dilution from the company’s recently announced KRW 900 billion rights offering and lingering uncertainty over its earnings outlook for the second half of the year.
Rights Offering Details
On September 23, Hanon Systems, an affiliate of Hankook & Company Group, disclosed plans for a KRW 900 billion rights issue, involving the issuance of 347.5 million new shares at KRW 2,590 per share – equivalent to 51% of its existing share count. The proceeds will be used primarily for debt repayment.
Analysts’ Views
Kiwoom Securities (Shin Yoon-cheol, Analyst):
“If the company fails to return to profitability despite debt repayment through the rights issue, the justification for the capital raise will be significantly undermined. Reducing interest expenses remains the key to resolving its recurring net losses.”
Shin also highlighted worsening earnings due to restructuring costs and volatility in R&D capitalization, adding that investors’ patience is wearing thin. Kiwoom lowered its target price from KRW 3,500 to KRW 3,300.
Meritz Securities (Kim Jun-sung, Analyst):
“Since most of the newly raised capital will be used for debt reduction, there will be no meaningful improvement in operating competitiveness. The share dilution from the new issuance is estimated at -34%.”
Meritz cut its target price to KRW 3,000, below the previous day’s closing price.
Market Reaction
On September 24, Hanon Systems’ stock closed at KRW 3,075, down more than 3%, reflecting investor concerns over dilution and uncertain profitability despite management’s assurances about a turnaround.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
