On the decision by Kim Seung-yeon, chairman of Hanwha Group, to gift half of his Hanwha equity to his three sons, the securities market projected on the 1st that "Hanwha, which had seen a significant adjustment in stock prices, may be reevaluated for its equity and business value."
SK Securities maintained its investment opinion on Hanwha as 'buy' and raised its target price from 44,000 won to 54,000 won, a 23% increase. DAISHIN SECURITIES also kept its investment opinion on Hanwha as 'buy' with a target price of 60,000 won. Hanwha's previous trading day's closing price was 40,950 won.
Earlier, Hanwha announced that it would gift 11.32% of the 22.65% equity held by chairman Kim Seung-yeon to his three sons. Kim Dong-kwan, vice chairman, will receive 4.86%, Kim Dong-won, president, 3.23%, and Kim Dong-sun, vice president, 3.23%. The securities market believed that the gift of equity from Chairman Kim would resolve uncertainties regarding succession related to Hanwha's stock prices.
Yang Ji-hwan, a researcher at DAISHIN SECURITIES, noted that "it is true that concerns over the method of securing funds for Hanwha's participation in a sudden large-scale capital increase announcement by Hanwha Aerospace and the potential damage to Hanwha's corporate value have been highlighted. However, the decision by Chairman Kim to gift to his three sons signals a commitment to refrain from using any irregular methods regarding the group's succession."
He analyzed that "as discount factors diminish, Hanwha, which had experienced significant stock price adjustments due to a series of events, can now be reevaluated for its equity and business value."
Choi Kwan-soon, a researcher at SK Securities, explained that "there were concerns regarding Hanwha's stock prices as Hanwha Energy, which the three sons own 100%, is preparing for an IPO," adding, "After Hanwha Energy is listed, the merger with Hanwha is likely to be discussed, and the higher Hanwha Energy's stock price and the lower Hanwha's stock price, the more favorable it will be for the three sons in terms of the merger ratio."
He stated, "We believe that concerns about Hanwha's stock price drop after the IPO of Hanwha Energy have significantly decreased due to this equity gift."
Meanwhile, after the equity gift, Hanwha's equity ownership will comprise of 22.16% in Hanwha Energy, 11.33% for Chairman Kim Seung-yeon, 9.77% for Vice Chairman Kim Dong-kwan, 5.37% for President Kim Dong-won, and 5.37% for Vice President Kim Dong-sun. Considering that the three sons own 100% of Hanwha Energy, it is explained by Hanwha Group that the ownership stake in Hanwha rises to 42.67%, completing the succession of management rights.
The Hanwha Group stated, "With this equity gift, the misunderstanding that 'Hanwha would lower the corporate value of Hanwha to merge with Hanwha Energy' will be corrected, and concerns over the erosion of shareholder value will also be resolved."