Park Jin-hai primarily focuses on K-dramas, entertainment shows and actor interviews. Beyond that, she also pens articles covering the broader arts scene, with a particular emphasis on classical music, dance and various aspects of lifestyle. Since joining The Korea Times in 2013, she has made significant contributions in the realms of hallyu (Korean wave), industry news and international affairs.
Hanwha expected to benefit from merger
By Park Jin-hai
.jpg?w=728)
By Park Jin-hai
The share prices of Hanwha Corp., the parent company of Hanwha Group specialized in defense business, are expected to perform strongly on a positive earnings outlook, analysts said Friday.
They said the company’s proposed merger with Samsung Techwin will further bolster its defense segment.
The stock closed up 1,700 won or 5.15 percent at 34,700 won, while the benchmark KOSPI closed down 0.65 points or 0.03 percent at 2,037.24.
“Unlike other affiliates, Hanwha recorded an operating profit that beat market expectations last year, boosted by robust sales in its core aerospace and defensive business,” said Park Joong-sun, an analyst at Kiwoom Securities.
The proposed merger last year with Hanwha TechM, a machinery and technology unit, will start creating synergy this year, he said.
Other analysts also said the stock is expected to maintain upward momentum.
Kang Sun-a, an analyst at KB Investment and Securities, said, “From the first quarter, sales from guided weapon Cheonmu, worth 150 billion won, will boost its bottom line. Together with the sales growth in the aero parts, we expect the company to record 5.8 trillion won in sales, up 14.6 percent this year.”
The entity created with the merger posted 5.4 trillion won in sales and 195 billion won in operating profit.
Park upgraded the rating to “buy” from “hold,” raising its target price to 41,000 from 31,700 won.
Analysts said Hanwha’s defensive segment will post strong growth.
Hanwha’s sales from the defensive industry unit alone is expected to increase 11 percent to 1.4 trillion won, with operating profit up 18 percent to 168 billion won, according to Jun Yong-gi, an analyst at Hyundai Securities.
“Hanwha TechM’s automation and eco-friendly technology has huge growth potential,” Jun said.
Analysts also said the company’s plan to take over Samsung Techwin is another plus for the company, because it can increase its share in the aerospace business.
“The acquisition is a positive for Hanwha. First, its financial burden is not that big as it will pay in phases. Second, it can exchange technologies, while achieving the economies of scale. Third, it will further strengthen its global competitiveness through the merger and will be able to take an upper hand in the segment,” Jun said.
Analysts are also positive about the performance of Hanwha’s other affiliates this year.
Hanwha E&C, Hanwha Life Insurance and Hanwha Resort are expected to either turn around or post stronger results this year.