April 27, 2024

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[THE INVESTOR] Hanwha Chemical will rise as its main product polyvinyl chloride is enjoying a boom, said Shinhan Investment on Sept. 18, raising the target price to 45,000 won (US$39.94) from 40,000 won.

PVC has entered a systematic upcycle, according to analyst Lee Eung-ju. Meanwhile, PVC manufacturing facilities with about 7.5 million tons capacity have been shut down since 2012, which amounts to 30 percent of the actual manufacturing capability of China last year, noted the analyst. 

The short-term outlook also is bright as its Ningbo branch’s operating profit, whose share dropped to 8.1 percent in the first half due to the lowered operating ratio of its client, will rebound to 22.5 percent, said Lee raising the estimated operating profit in the third quarter to 227.2 billion won from 193.7 billion won.

Its basic materials sector will be boosted by strong prices of its main products PVC and caustic soda, and solar unit’s operating profit will almost double thanks to the supply to NextEra of the US, forecast the analyst. The chemical company’s profits too will advance as earnings of its subsidiaries improve, added Lee. 

By Hwang You-mee (glamazon@heraldcorp.com)