NH Investment & Securities said on the 23rd that Hanwha's discount remains high even after the spin-off. It kept a "buy (BUY)" rating and raised the target price to 154,000 won from 117,000 won. Hanwha's previous trading day closing price was 115,000 won.
Lee Seung-young, an analyst at NH Investment & Securities, said, "Despite the share price rise following the announcement of the spin-off and the plan to enhance corporate value, the discount to current net asset value (NAV) is 58.9%, still higher than other holding companies," and noted, "Further narrowing of the discount is expected."
The discount to Hanwha's target NAV analyzed by the analyst is 45%. This reflects expectations that the equity value of investment assets such as Hanwha Aerospace will rise, and that the number of common shares will decrease by 5.9% due to share cancelation.
After the spin-off, Hanwha's main cash flows are expected to come, as before, from brand license revenue, dividend income, and its own businesses. The analyst projected, "Brand license revenue will increase in line with the top-line growth of affiliates in defense, aerospace, shipbuilding, and offshore."
Meanwhile, Hanwha is pushing for a spin-off on July 1. Hanwha will have Hanwha Aerospace, Hanwha Systems, Satrec Initiative, Hanwha Ocean, Hanwha Engine, Hanwha Solutions, Hanwha Life Insurance, Hanwha General Insurance, Hanwha Asset Management, and Hanwha Investment & Securities as subsidiaries, while the new company Hanwha Machinery & Service Holdings will have Hanwha Vision, Hanwha Semitech, Hanwha Momentum, Hanwha Robotics, and Hanwha Galleria as subsidiaries.