Samsung Securities Projects NAV Discount Resolution for Hanwha Following Spin-Off Plan
Samsung Securities has raised its target price for Hanwha Corp. from 1.04 million won to 1.5 million won, anticipating that the company's planned spin-off will resolve its asset value discount. The split will create Hanwha Corp., focusing on defense and energy, and Hanwha Machinery & Services Holdings, which will manage machinery services, aiming for significant growth in revenue and dividends. The firm emphasizes the need for a sustainable capital policy to enhance shareholder returns and reflect subsidiary value in stock prices.
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Samsung Securities announced on December 15 that Hanwha's planned spin-off will resolve the asset value (NAV) discount for Hanwha Corp., raising its target price from 1.04 million won to 1.5 million won. Hanwha will split into Hanwha Corp., focusing on defense, shipbuilding, energy, and finance, and Hanwha Machinery & Services Holdings, which will manage machinery and services.
The spin-off aims to enhance business efficiency and capital allocation. Hanwha Corp. targets a 10% compound annual growth rate (CAGR) in consolidated revenue and a 12% return on equity (ROE) by 2030. Hanwha Machinery & Services Holdings aims for a 30% CAGR and a 1,000 won dividend per share in its first year. Samsung Securities highlighted the importance of a sustainable capital policy for the new company and expects improved shareholder return predictability to enhance stock price reflection of subsidiary value.
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