Hanwha
Hanwha (000880.KS) jumped 29% in early trading on the 25th as it resumed trading following a corporate spin-off, with buying driven by expectations that the holding-company discount would narrow as the group restructures around key affiliates in defense, shipbuilding, energy and finance.
As of 9:12 a.m. on the 25th, Hanwha traded at 124,900 won, up 24,300 won, or 29%, from the previous session, according to the Korea Exchange. Hanwha Machinery & Service Holdings, the newly created entity that made its trading debut the same day, surged 26.00%, triggering a static volatility interruption.
On the 1st of this month, Hanwha split through a spin-off into the surviving entity, Hanwha, and the new entity, Hanwha Machinery & Service Holdings.
The surviving Hanwha retained stakes in core affiliates in defense, shipbuilding, energy and finance, including Hanwha Aerospace, Hanwha Ocean, Hanwha Solutions and Hanwha Life Insurance. Hanwha Vision, Hanwha Galleria, Hanwha Hotels & Resorts, Hanwha Momentum and Hanwha Robotics were transferred to the new entity.
Analysts said the spin-off simplifies Hanwha’s complex business structure and reduces the discount factors that had applied to its unlisted subsidiaries. With about 80% of the value of its listed subsidiaries concentrated in Hanwha Aerospace, the surviving entity has effectively been restructured into a holding company centered on defense and shipbuilding, they said.
Mirae Asset Securities maintained its “buy” rating on Hanwha and raised its target price to 185,000 won from 100,700 won.
“The split changes not only earnings but the structure of how the discount is calculated,” said Ryu Je-hyun, an analyst at Mirae Asset Securities. “The weighting of unlisted subsidiaries effectively disappears, and as defense rises to about 80% of listed assets, the comparison group shifts from a diversified holding company to a defense holding company.”
Mirae Asset Securities expects Hanwha’s net-asset-value discount to narrow to 50.85% over the next 12 months, from 54.75% just before trading was suspended. It said shareholder-return measures, including a minimum dividend of 1,000 won per share and the cancellation of treasury and preferred shares, would also support the reassessment of the company’s value.
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