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(Photo: Hanwha Solutions) |
[Alpha Biz= Reporter Kim Minyoung] On the 28th, KB Securities downgraded its investment rating for Hanwha Solutions from "Buy" to "Hold" due to market and performance uncertainties this year. However, the target price was maintained at 29,000 KRW.
KB Securities estimated Hanwha Solutions' second-quarter operating loss to be 56 billion KRW, aligning with the market consensus of -46.2 billion KRW. The recovery in performance compared to the 216.6 billion KRW operating loss in the first quarter is attributed to a rebound in the sales volume of renewable energy modules. The increase in production from the U.S. module factory, which began operations in April, also had a positive impact.
Despite a decline in wafer prices since the beginning of the year, the stability in module prices has been favorable for Hanwha Solutions, leading to a recovery in margins. If the utilization rate normalizes, there is potential for significant improvement in the second-half performance.
To achieve Hanwha Solutions' annual module sales guidance of 9GW, full operation in the third and fourth quarters and depletion of inventory in the first and second quarters are necessary. Long-term, even if Chinese module inventory is not depleted, the situation is expected to stabilize and improve significantly from early December when tariffs will be applied to the inventory.
On the downside, there is concern about the high inventory of Chinese modules (rerouted through Southeast Asia) in the U.S. market needing to be depleted by early December. Even if utility-scale module contracts were completed 2-3 years ago, Hanwha Solutions might face market share competition in the high-value residential segment if Chinese modules are sold at a discount.
Jeon Woo-jae, a researcher at KB Securities, noted, "The net interest expense exceeding 100 billion KRW since the fourth quarter of last year is also a burden."
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
