"Sell rating on Hanwha Solutions" Target price slashed in half to 25,000 won... LG Innotek enters humanoid AI beneficiary zone with 380,000-won target price [Stocktopia]

[The Financial News] On the morning of March 27, here is a summary of key reports from major securities firms.
Hanwha Solutions Corporation has decided on a 2.4 trillion won Paid-in Capital Increase, but the market’s view remains chilly, with DS Investment & Securities Co., Ltd. cutting its target price by 47% and, unusually, downgrading its investment rating by two notches. LG Innotek Co., Ltd. is being assessed as having entered an AI beneficiary phase, driven by the start of mass production of cameras for Humanoid robots in the second half of this year, and its first-quarter operating profit is projected to reach 200.7 billion won, 17% above the market consensus. Korean Air Co., Ltd. (Korean Air) is expected to post an 11% year-on-year increase in first-quarter operating profit, helped by demand shifting to routes via the Incheon Airport hub after Middle East airspace was effectively closed due to the U.S.-Iran war.
◆Hanwha Solutions Corporation (009830)― DS Investment & Securities Co., Ltd. / Analyst Joo Won Ahn
- Target price: 25,000 won (downgraded from 47,000 won) | Previous closing price: 36,800 won
- Investment rating: Sell (downgraded by two notches from Buy)
DS Investment & Securities Co., Ltd. took the unusual step of cutting its investment rating on Hanwha Solutions Corporation by two levels, from "Buy" to "Sell," and lowered its target price by 47% to 25,000 won. Analyst Joo Won Ahn argued that, with Net Borrowings projected to reach 13 trillion won by the end of 2025, repaying 1.5 trillion won will not meaningfully reduce debt. Ahn also noted that investing 900 billion won in a tandem cell line and a TOPCon cell production line, when the financial position is not strong, is hard to view as a rational investment.※ Paid-in Capital IncreaseThis is a method of raising funds by issuing new shares. For existing shareholders, the total number of shares increases, which dilutes (reduces) the value of their holdings. In the current Paid-in Capital Increase by Hanwha Solutions Corporation, 0.34 new shares are allocated per share. A shareholder holding 10 million won worth of stock would need to pay in roughly an additional 3.4 million won to maintain the same ownership stake.
Hanwha Solutions Corporation made a surprise decision on the Paid-in Capital Increase without any prior mention at the regular General Meeting of Shareholders just two days earlier. Critics point out that repaying 1.5 trillion won out of 13 trillion won in Net Borrowings will not significantly change its financial structure, and that the remaining 900 billion won will be spent on developing a next-generation solar cell business that is not yet profitable. This has sparked backlash that the company is "using shareholders’ money to pay down debt and fund future investments even though it is not in the black."※ Tandem cell line and TOPCon cell production lineThese refer to production lines for next-generation solar cell technologies known as tandem and TOPCon. TOPCon is a cutting-edge, current-generation technology that improves power conversion efficiency over conventional silicon solar cells. Tandem technology stacks a new material called perovskite on top of silicon, and in theory can push efficiency above 40%. However, no company has yet succeeded in mass production, so it will take time before the technology can be monetized.
◆LG Innotek Co., Ltd. (011070)― NH Investment & Securities Co., Ltd. / Analyst Hwang Ji-hyun
- Target price: 380,000 won (raised) | Previous closing price: 303,000 won
- Investment rating: Buy (maintained)
NH Investment & Securities Co., Ltd. raised its target price for LG Innotek Co., Ltd. to 380,000 won, forecasting that first-quarter operating profit will surge 60.2% year-on-year to 200.7 billion won, beating the market consensus of 172 billion won. Analyst Hwang Ji-hyun explained that mass production of cameras for Humanoid robots is set to begin in the second half of this year, diversifying camera applications. The analyst added that the semiconductor package substrate business is already running at full capacity and is now considering capacity expansion, while the Flip Chip Ball Grid Array (FC-BGA) package substrate business has secured a growth path from the start of server-use mass production in 2027 to meaningful earnings contribution in 2028.※ Flip Chip Ball Grid Array (FC-BGA) package substrateThis is an advanced substrate that connects high-performance, high-heat semiconductor chips—such as GPUs for Nvidia Corporation’s Artificial Intelligence Server products—to the mainboard. Chips used in AI servers are much larger and more complex than those in smartphones, so the substrate unit price is also far higher. LG Innotek currently produces mobile semiconductor substrates and plans to expand into higher value-added server-use semiconductor substrates starting in 2027.
◆Korean Air Co., Ltd. (Korean Air) (003490)― Yuanta Securities Korea Co., Ltd. / Analyst Choi Ji-woon
- Target price: 32,000 won (raised from 29,000 won) | Previous closing price: 24,950 won
- Investment rating: Buy (maintained)
Yuanta Securities Korea Co., Ltd. raised its target price for Korean Air to 32,000 won, projecting that first-quarter standalone operating profit will rise 11% year-on-year to 389.5 billion won. Analyst Choi Ji-woon noted that operational disruptions at Middle Eastern airports caused by the U.S.-Iran war have boosted demand for Americas routes and European routes that connect via the Incheon Airport hub. Strong demand for high value-added cargo such as semiconductors, combined with a 2% increase in freight rates, has also lifted cargo revenue by 3.4%. However, Choi cautioned that the recent spike in aviation fuel prices will, with a time lag, weigh on profitability in the second quarter, and that the full-year operating margin is likely to decline compared with last year.

sms@fnnews.com Seong Min-seo Reporter