Heungkuk Securities said on the 10th that it is time for Hanwha to step up efforts to expand shareholder returns. It kept its "Buy" recommendation and cut the target price to 115,000 won from 130,000 won. Hanwha's closing price the previous day was 84,700 won.
Park Jong-ryeol of Heungkuk Securities said, "We lowered the target price in consideration of the decline in the value of subsidiaries' equity," and noted, "Since the late October peak, the share price has fallen, bringing the price-earnings ratio (PER) and price-to-book ratio (PBR) to around 6.7 times and 0.6 times, respectively, which has enhanced valuation appeal."
He added, "It is time to raise Hanwha's dividend yield by increasing the payout ratios at its subsidiaries," and pointed out, "If the company shifts to a more proactive stance on shareholder returns through dividends and share cancellations, an additional re-rating of the stock is possible."
Heungkuk Securities estimated that Hanwha will post consolidated sales of 22 trillion 200 billion won and operating profit of 1 trillion 500 billion won in the fourth quarter of this year (Oct.–Dec.). Those would be up 23.4% and 30.6%, respectively, from a year earlier.
Park said, "Despite Hanwha Solutions' slump due to low utilization in the renewable energy segment, we expect solid earnings to continue on the back of robust profit generation at Hanwha Aerospace and Hanwha Life."