Hanwha, which saw its shares jump over 17% on the first day of trading following its spin-off, entered a period of consolidation in early trading the next day. Analysts suggest that despite the short-term surge, the stock still has significant upside potential due to its high discount rate compared to net asset value (NAV).
As of 10:13 a.m. on the Korea Exchange, Hanwha shares were trading at 118,200 won, up 0.08% (100 won) from the previous trading day.
On the previous day, Hanwha closed at 118,100 won, marking a 17.40% increase from its opening price. The newly listed Hanwha Machinery and Service Holdings ended the day at 10,010 won, up 0.10%.
Hanwha underwent a spin-off, separating its defense, shipbuilding, marine, energy, and finance sectors into a holding company, while creating a new entity focused on technology and life sectors. The split ratio was set at 0.7563533 for the holding company and 0.2436467 for the new company.
Samsung Securities rated Hanwha as undervalued even after its relisting, maintaining a 'buy' recommendation and a target price of 170,000 won. Based on the previous day's closing price, this indicates a potential upside of 43.9%.
Park Se-woong, a researcher at Samsung Securities, noted, "The NAV discount rate for Hanwha based on the closing price on the first day of relisting is around 69%, which is higher than the average discount rate of 61% in the month leading up to the trading halt, indicating it remains undervalued."
Strong earnings are also expected to support the stock price. Hanwha reported consolidated revenue of 28.6 trillion won for the second quarter, a 49% increase compared to the same period last year, while operating profit rose 81% to 2.4 trillion won, exceeding market expectations by 53%.
Park added, "With the growth in affiliate performance, profit resilience is strengthening, and the cash generation ability remains unchanged post-split. Even if the target NAV discount rate narrows to 63%, the stock price could still have a potential upside of 44%."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.