BNK Investment & Securities said on the 27th that Hanwha is expected to see improved investment momentum from shareholder-friendly policies. It maintained a Buy rating and lowered the target price to 120,000 won, in line with the affiliate share price levels. Hanwha's previous day's closing price was 79,500 won.
BNK Investment & Securities pointed to Hanwha Aerospace as the driving force behind Hanwha's share price this year.
Researcher Kim Jang-won at BNK Investment & Securities said, "Earnings improved on the back of overseas orders, and the rights offering to strengthen the business base became a starting point for removing the issue of succession by the largest shareholder that had hung over Hanwha," adding, "With the stock down from its intrayear peak, shareholder returns are now the force supporting the share price."
With the resumption of dividends at Hanwha Life still uncertain this year, the affiliate with the most certain dividend potential is Hanwha Aerospace, Kim said.
Kim said, "While we cannot rule out the possibility that dividend expansion could be curbed, given that a rights offering was conducted to expand production capacity, among major affiliates it has the highest capacity, so its contribution as Hanwha's dividend funding source is expected to grow."
It also assessed Hanwha's standalone business performance as solid. Kim said, "Even if standalone sales in the third quarter fell year over year and quarter over quarter, revenue was sound," adding, "We believe it has secured sufficient growth potential in terms of business scale, and in the case of large mixed-use development projects, the client is the government, so as long as the contracted construction period is met, a certain level of profitability is secured."