Hanwha Solutions recorded an earnings surprise in its quarterly results released earlier this year, overwhelming market expectations. The company, which has been engaged in solar and chemical businesses, successfully turned profitable across all business segments for this quarter. The company's outlook is favorable, suggesting that performance will continue to improve once full-scale solar cell production begins at its Cartersville plant in the United States. According to the financial investment industry on the 29th, Hanwha Solutions achieved 92.61 billion won in quarterly operating profit on a consolidated basis, which is far higher than the average forecast of 11.5 billion won shared by securities firms. Compared to the 48.97 billion won operating loss recorded in the fourth quarter of last year, the recovery trend is very steep, and net loss also decreased significantly from 41.117 billion won in the previous quarter to 38.198 billion won.
The core factors for the performance improvement include recording profits in all business segments and the normalization of operations at the U.S. plant. Revenue from the renewable energy segment increased by 3% year-over-year to 211.09 billion won, but changes were more pronounced in terms of operating profit and loss. It turned from an operating loss of 39.6 billion won in the previous quarter to a profit, generating 6.22 billion won in operating profit. As the issue of delayed customs clearance for solar cells to the U.S. was resolved by year-end, factory operations were normalized, leading to a record of 21.61 billion won in advanced manufacturing tax credit receipts, an 112% increase compared to the previous quarter. Additionally, the strengthening of regulations on Southeast Asia bypass exports led to a price increase of approximately 14% for modules compared to the previous quarter, which was reflected in the performance.
Kim Tae-yong, Head of Strategy at Hanwha Solutions' Q-Cells segment, explained during a phone conference held after the earnings release that while total U.S. module demand is 40 gigawatts annually, there is a shortage of about 10 gigawatts in U.S.-produced cell production capacity, which is a key factor for securing tax credits, until early next year. He predicted that the premium for U.S.-produced cells will be further strengthened, and viewed that cell values produced at Q-Cells and Georgia Solar Hub will continue to rise. Despite such positive factors, securities firms have divergent evaluations due to concerns about inventory issues and damage to shareholder value from capital increases.
Jeon Yu-jin, an iM Securities researcher, analyzed that inventory at the end of 2025 is expected to reach the highest level since 2022, and the possibility of significant price increases from year-end inventory reduction is low. Lee Dong-wook, an IBK Investment Securities researcher, raised the target stock price due to the space solar momentum but gave a short-term buy opinion considering the dilution factor of capital increases. On the other hand, Lee Young-wook, a Hanwha Investment Securities researcher, positively evaluated the reduction in capital increase scale and mentioned the introduction of high-efficiency TOPCon process and plans to enter the space solar market. Jo Hyun-ryeol, a Samsung Securities researcher, maintained his hold opinion reflecting the recent surge in stock prices, but added that he could upgrade his investment opinion once the normalization of U.S. factory operations is confirmed.