Hanwha Solutions is holding back-to-back briefings for institutional investors to strengthen communication with shareholders. As criticism mounted that it had not provided shareholders with sufficient information, such as the background and method of fundraising, during the process of carrying out a rights offering worth over 1 trillion won, the company is seeking to address those concerns. Hanwha Solutions is signaling its resolve to complete the rights offering by touting development of next-generation solar technology.
According to the industry on the 29th, Hanwha Solutions will launch a large-scale first-quarter earnings briefing for domestic and overseas institutional investors starting today. At a briefing on the rights offering for institutional investors on the 21st, Hanwha Solutions said it would create multiple opportunities to strengthen shareholder communication after the first-quarter earnings release.
Hanwha Solutions delivered a performance in which all divisions swung to profit in the first quarter of this year. On a consolidation basis, first-quarter revenue was 3.882 trillion won, up 25% from a year earlier, and operating profit was 92.6 billion won, up 205%. At the earnings conference call held the previous day, Hanwha Solutions said the profit was not a one-off and that structural profit realization is possible by improving its internal fundamentals.
In particular, Hanwha Solutions is putting effort into explaining that it expects to benefit from U.S. solar policies and changes in market conditions. Of the 1.8 trillion won in proceeds from the rights offering, 900 billion won is earmarked for facility investment, on the grounds that funding is needed for new products and facility investment.
The U.S. government is tightening regulations on Chinese-made solar cells and modules, effectively pushing them out of the market. China controls 80% to 90% of the global solar supply chain. If Chinese products exit the U.S. market, the Qcells division of Hanwha Solutions, which has production bases in the United States, will be in a favorable position. Hanwha Solutions is preparing to start up its integrated solar manufacturing complex in the United States, the "Solar Hub."
It is also highlighting the rationale for developing tandem cells based on perovskite, a next-generation solar technology. The industry views tandem cells as a technology capable of achieving efficiency above 30%. As cell efficiency rises, power output per module installation area increases, allowing for high power generation even in small areas. Corporations around the world are engaged in fierce competition to preempt the tandem cell market.
Hanwha Solutions is also said to be emphasizing self-rescue efforts and the urgency of improving its financial structure at the briefings. Previously, public opinion was strong that it lacked preemptive self-help measures as it proceeded with the rights offering while holding back 5 trillion won worth of non-operating asset. After the Financial Supervisory Service (FSS) applied brakes, Hanwha Solutions put the sale of equity in Hanwha Impact and the securitization of equity in Hanwha Hotels & Resorts on the review list.
The key is whether the National Pension Service can be persuaded. Among Hanwha Solutions' major shareholders, the only shareholder other than Hanwha holding more than 5% is the National Pension Service (5.72%). If the National Pension Service takes its full allocation in this rights offering, an additional 83.4 billion won will be invested. In 2021, Hanwha Solutions carried out a 1.2 trillion won rights offering, and the National Pension Service participated 100% at the time.
A person in the securities industry said, "At recent briefings, many questions are about whether, if Hanwha Solutions invests 900 billion won of the proceeds into the business, the technology gap with Chinese corporations will clearly widen and whether it can preempt the solar materials market."