Hanwha Solutions: "Selling Prices and Advanced Manufacturing Production Credit (AMPC) to Rise Together" Next Year... Solid Earnings Improvement

[Financial News] Hanwha Solutions' strategy for expanding its U.S. renewable-energy business, unveiled at Corporate Days in Singapore and Hong Kong from the 15th to the 18th, is emerging as a still-valid investment thesis. Higher U.S. module prices following the implementation of Section 232 and increased receipts from the Advanced Manufacturing Production Credit (AMPC) based on Korean-made cells are expected to serve as the two main pillars driving earnings improvement in 2027. Market expectations are rising as forecasts suggest that U.S. utility-scale module prices, currently in the mid-to-high 20-cent range, could jump to at least 38 cents after Section 232 takes effect on December 4.
According to NH Investment & Securities on the 21st, Hanwha Solutions presented a scenario for earnings improvement next year through higher selling prices and increased AMPC receipts at its Singapore and Hong Kong Corporate Days. This means that two policy variables—the U.S. government's Section 232 policy to protect its domestic solar industry and stronger tax benefits for Korean-made modules—align closely with Hanwha Solutions' business model.
In terms of higher selling prices, the module-specific minimum import price (MIP) of 38 cents per watt set by the U.S. government is regarded as the minimum level needed to cover the cost burdens of local manufacturers. This means that the U.S. utility-scale module market, where prices have been in the 20-cent range amid global low-price competition, will inevitably be significantly reshaped after the policy takes effect. Hanwha Solutions has secured a vertically integrated supply chain through cell-manufacturing facilities in Korea and Malaysia, leading to widespread expectations that it could be the most direct beneficiary of the price increase.
The increase in AMPC receipts is an even more noteworthy factor. If the Cartersville plant sources all of its wafers at 4 cents per watt, cells at 4 cents per watt, and modules at 7 cents per watt from Korea, it can receive a total AMPC of 15 cents per watt. If current module sales normalize at around 2.5 GW per quarter, this could translate into at least KRW 150 billion in additional annual earnings. In addition, the Cartersville cell facilities are expected to reach full operation between late Q3 and early Q4, significantly improving the stability of the Korean-made cell supply.
Hanwha Solutions' internal analysis forecasts that the impact of higher costs resulting from the MIP will be limited compared with the increase in selling prices. Polysilicon procurement costs may rise slightly, but the increase would offset only part of the overall rise in selling prices. This suggests that Hanwha Solutions could achieve higher margins than competitors dependent on overseas cell procurement by leveraging the advantages of vertical integration.
Hanwha Solutions' restructuring of its business portfolio is another point of interest. The company is shifting from its previous developer-centered business toward an engineering, procurement, and construction (EPC) and installer-centered model. While the developer business has significant quarterly earnings volatility depending on the timing of deal closings, the EPC business can recognize revenue and profit based on the percentage of completion, providing more stable cash flow. The company's goal of entering the top five EPC companies in the United States over the medium to long term shows that its strategy of business diversification and risk distribution is taking concrete shape.
The allocation of proceeds from the KRW 1.2 trillion rights offering is also strategic. Approximately KRW 900 billion is earmarked for capital expenditures, focused on investments in perovskite-tandem cell facilities targeted for completion in 2028 and in improving the efficiency of existing modules through TOPCon and N-type technologies. The remaining approximately KRW 300 billion will be used to reduce borrowings, strengthening the company's financial health.
NH Investment & Securities analyst Choi Young-kwang said, "Hanwha Solutions' 2027 earnings improvement scenario is firmly supported by the clear policy-driven event of Section 232 and the sequential ramp-up of the Cartersville cell facilities to normal operations." He cautioned, "However, variables could arise depending on the actual response of spot demand and competitors' strategies."

[email protected] Kang Gu-gwi Reporter