Hanwha(000880) jumped more than 20% early on the 25th. Buying is seen concentrating on expectations of a business structure revaluation following a spin-off and an easing of the discount factor on unlisted subsidiaries.
At 9:19 a.m. that day on the Korea Exchange, Hanwha was trading at 123,000 won, up 22.27% (22,400 won) from the previous session.
At the same time, the newly established entity Hanwha Machinery & Service Holdings(0220W0) was locked at the upper price limit at 13,000 won, surging 30.00% (3,000 won) from the opening price (10,000 won) immediately after the market opened.
Earlier, on Aug. 1, a spin-off split Hanwha into the surviving entity Hanwha and the newly established Hanwha Machinery & Service Holdings. The split ratio between the two companies is 0.7564 to 0.2436. Trading in Hanwha, which had been suspended on July 30, resumed that day. Hanwha Machinery & Service Holdings also completed its new listing procedures.
Hanwha holds equity in core group subsidiaries in defense, shipbuilding, energy, and finance, as well as its own construction and global businesses. The newly established entity, by contrast, controls Hanwha Vision, Hanwha Galleria, Hanwha Hotel & Resort, Hanwha Momentum, and Hanwha Robotics.
In the securities industry, the view is that the spin-off will streamline the business structure and ease the discount applied to unlisted subsidiaries, lifting the share price. With about 80% of the subsidiary value of the surviving entity concentrated in Hanwha Aerospace, some expect it could be revalued as a holding company spanning defense and shipbuilding.
Mirae Asset Securities raised its target price for Hanwha that day to 185,000 won from 100,700 won.