Hanwha Chemical’s basic materials and solar businesses will improve, said KB Investment and Securities on Feb. 21, raising the target price to 28,000 won (US$24.90) from 25,000 won and maintaining a “buy” recommendation.
Its revenue in the fourth quarter last year increased 2.4 percent on-year to 2.41 trillion won, but operating loss reached 95.9 billion won, going in the red from a year ago. Asset impairment from polysilicon facilities and impairment loss from Hanwha Q Cell’s insolvent assets have significantly undermined its earnings, well below market expectations, said analyst Baek Yeong-chan.
Revenue in the first quarter will rise 7.8 percent on-year to 2.24 trillion won, while operating profit will drop 34.6 percent to 112.5 billion won. But one-off costs from basic materials and solar departments have been eliminated and profits will normalize, said the analyst. Operating profit from basic materials will go in the black from the previous quarter to 64.5 billion won and that from solar energy will advance to 42.0 billion won, gaining on-year, he said.
By Hwang You-mee (firstname.lastname@example.org)