Hyundai Motor Securities analyzed that the direction of the net worth (NAV) change for Hanwha is important. It raised its target stock price from the previous 40,000 won to 48,000 won and suggested a 'buy' investment opinion. On the 27th, Hanwha's closing price was 41,100 won.
On the 28th, Kim Han of the Research Institute at Hyundai Motor Securities said, "Hanwha's NAV is 12.6 trillion won, its operating value is 1.1 trillion won, and the pre-interest, taxes, depreciation, and amortization (EBITDA) is at a level of 3.2 times when excluding dividends and one-time construction profits," adding, "The NAV proportion of Hanwha Aerospace's equity value is 82%, recommending a response based on the direction of the listed equity value that affects the NAV."
Hanwha Aerospace recently announced a paid-in capital increase of 3.6 trillion won, and Hanwha stated it would participate according to its equity ratio. The amount is 980.3 billion won. Kim noted, "The uncertainty regarding the size of participation in the capital increase has been resolved."
Regarding the background of Hanwha's stagnant stock price, Kim pointed to the decrease in separate operating profit. He explained, "Due to continued business restructuring, Hanwha's separate profit has been on a declining trend," but noted, "The renewal of the contract for Hanwha Construction's Iraq project was disclosed last December, leading to an increase in earnings capacity," adding, "A basis for growth has been established." As the construction resumption was expected in the second half, the risk is expected to be limited unless there are changes in timing or projected sales in future performance announcements.
Kim said, "There will be no NAV fluctuation at the time of acquiring the new shares resulting from Hanwha Aerospace's capital increase," stating that "The net borrowings will increase by the same amount as the increase in equity value." He emphasized, "Future trends in equity value will affect the NAV."
As of the end of last year, Hanwha's net borrowings amounted to 3.6 trillion won. This is attributed to a decrease in compensation payments from the Iraq project in construction. Kim added, "Funds for the capital increase will also partly be covered by some borrowing and the recovery of accounts receivable from Iraq."