Kyobo Securities on the 22nd assessed Hanwha Solutions' reduction of its rights offering size, saying, "Shareholder burden has eased, but execution in fundraising and subsequent earnings improvement remain challenges."
Earlier, Hanwha Solutions on Mar. 26 announced a rights offering totaling 2.4 trillion won. Of that, 1.5 trillion won was to be used for debt repayment and 900 billion won for facility investment.
However, as the large share of "debt repayment" within the use of proceeds drew attention and shareholder backlash followed, the company on the 17th reduced the offering size to 1.8 trillion won. While keeping the facility investment amount unchanged, it cut the debt repayment funds to 900 billion won and decided to secure the shortfall of 600 billion won through self-help measures.
Specifically, it plans to raise 300 billion won by selling equity in non-operating asset Hanwha Impact and by restructuring Hanwha Hotels & Resorts, and to procure an additional 300 billion won through overseas subsidiaries.
Cho Hye-bin, senior researcher at Kyobo Securities, said, "With the smaller offering and concurrent self-rescue plan, shareholder burden has eased from the initial announcement," but noted, "For the 300 billion won of quasi-equity funding, as of March the additional capacity was only 100 billion won and terms were unfavorable, so execution needs to be verified."
The burden of equity dilution is also expected to ease somewhat. The number of shares to be issued will be reduced from 72 million to 56 million, lowering the dilution rate for existing shareholders from 29.5% to 24.5%.
Still, whether the funds raised through the rights offering will translate into actual earnings improvement remains to be seen. Of the investment, the company plans to spend 100 billion won on a tandem pilot upgrade, 400 billion won on converting to TOPCon cell lines, and 400 billion won on building a tandem gigawatt-scale mass-production line.
Cho presented Hanwha Solutions' mid- to long-term targets as consolidated revenue of 33 trillion won and operating profit of 2.9 trillion won in 2030. The figures are achievable if the renewable energy business reaches 21.5 trillion won and the Advanced Manufacturing Production Credit (AMPC) accumulates 5.9 trillion won.
To achieve this, the engineering, procurement and construction (EPC) business must grow to 12 trillion won alongside the residential energy business reaching 6.5 trillion won. However, with the U.S. Investment Tax Credit (ITC) set to end in 2027 and AMPC also scheduled to be phased down through 2030, there are concerns about whether profitability at the current level can be maintained thereafter.
In addition, if international and U.S. certifications (IEC, UL) related to tandem cells proceed as planned and the chemical business reorganization with Lotte Chemical and DL Chemical takes shape, there is potential for a reassessment of corporate value. However, uncertainties remain, including the TOPCon patent lawsuit with First Solar, so analysts say it is necessary to continuously monitor the pace of industry recovery alongside the implementation of self-help measures.