Hanwha's shares have surged over 15% on the first day of trading following its spin-off. The strong performance is attributed to expectations of a restructuring focused on defense and shipbuilding, as well as increased shareholder returns.
As of 9:50 a.m. on the Korea Exchange, Hanwha's stock was trading at 116,300 won, up 15.61% or 15,700 won from its opening price.
The newly listed Hanwha Machinery and Service Holdings, which was created from the spin-off, has also hit its upper trading limit. The stock experienced a sharp rise early in the session, triggering a volatility control mechanism.
On July 15, Hanwha's extraordinary general meeting approved the spin-off plan, separating the defense, shipbuilding, marine, energy, and finance sectors into the existing company, while the tech and life sectors were transferred to the new entity, Hanwha Machinery and Service Holdings. The split ratio was set at 0.7563533 for the existing company and 0.2436467 for the new company.
Market analysts believe that the restructuring will reduce the discount on the existing company's corporate value, as it will now focus on defense and shipbuilding. Five companies, including Hanwha Vision, Galleria, Hotel and Resort, Momentum, and Robotics, have been transferred to the new entity, while key affiliates, including Hanwha Aerospace, remain with the existing company.
Analysts are also paying attention to the potential for a reassessment of corporate value. Ryu Je-hyun, a researcher at Mirae Asset Securities, raised Hanwha's target stock price to 185,000 won in a report released today.
Ryu noted, "With all unlisted subsidiaries transferred, the structural discount has been significantly reduced. The existing company's value will become more concentrated in its core subsidiaries in defense, shipbuilding, energy, and finance, enhancing its competitiveness."
Looking ahead, the enhancement of shareholder value is expected to positively impact the stock price. Ryu explained, "Most of the shareholder return resources will remain with the existing company, and the minimum dividend of 1,000 won per share, along with the planned buyback of treasury and preferred shares, is expected to boost shareholder value in the future."
* This article has been translated by AI.
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