20171114-三星证券-Looking_toward_1Q18_5页_296kb

Hansol Chemical (014680) Summary

Core Content

This document is an investment report on Hansol Chemical (014680) by Samsung Securities, outlining the company's performance, financial outlook, and valuation metrics. It provides insights into the stock's current status, historical performance, and future projections based on industry developments, particularly those related to Samsung Electronics (SEC).

Main Points

• Current Rating and Target Price: The analyst maintains a BUY rating with a target price of KRW90,000, unchanged from previous estimates.
• Current Price and Market Cap: The current price is KRW71,500, and the market cap is KRW807.61b/USD720.69m.
• Share Float: There are 11,295,195 shares in float.
• Performance Overview (1Y):
  • Hansol Chemical: -1.0% (1M), -13.8% (6M), -16.1% (12M)
  • Kospi Index: -3.2% (1M), -22.1% (6M), -34.2% (12M)
• Key Changes:
  • 2017E EPS: Increased by 3.8% to KRW5,489
  • 2018E EPS: Slight increase of 0.0% to KRW6,702
• Analyst's Outlook:
  • Shares have been correcting due to QLED materials sluggishness, but the analyst expects a turnaround due to upcoming Samsung-related events.
  • SEC's investment in DRAM and the construction of a new fab in 1H18 are expected to boost Hansol Chemical's precursor sales and improve investor sentiment.
  • CES 2018 will provide new consumer feedback on Samsung TVs, which could also positively impact the company.

3Q Results

• Sales: KRW135.2b, up 9.9% q-q and 3.8% y-y
• Operating Profit: KRW23.5b, up 28.5% q-q and down 9.9% y-y
• Pre-Tax Profit: KRW24.5b, up 28.4% q-q and 7.5% y-y
• Net Profit: KRW20.2b, up 38.9% q-q and 5.7% y-y
• Margins:
  • Operating profit margin: 17.4%
  • Pre-tax profit margin: 18.1%
  • Net profit margin: 14.9%

Valuation Summary

• P/E (2016–2018E): 14.5, 13.0, 10.7
• P/B (2016–2018E): 2.8, 2.4, 2.0
• EV/EBITDA (2016–2018E): 10.0, 9.3, 7.4
• EPS Growth (2016–2018E): 63.5%, 11.1%, 22.1%
• ROE (2016–2018E): 21.3%, 20.1%, 20.7%
• Fair Value: KRW87,131
• Upside Potential: 25.9% based on the current price of KRW71,500

Financial Highlights

• EPS (Parent-based): 3,023 (2015), 4,942 (2016), 5,489 (2017E), 6,702 (2018E)
• BVPS (Book Value per Share): 25,465 (2016), 30,056 (2017E), 35,883 (2018E)
• DPS (Dividend per Share): 1,000 (2017), 1,000 (2018)
• Net Debt to Equity: 75.3% (2015), 64.5% (2016), 41.7% (2017E), 22.6% (2018E)
• Interest Coverage Ratio: 6.6 (2015), 8.4 (2016), 7.9 (2017E), 10.6 (2018E)

Forecast Revisions

• Sales: 527.0 (2017E), 575.1 (2018E)
• Operating Profit: 83.9 (2017E), 104.5 (2018E)
• Pre-Tax Profit: 83.2 (2017E), 102.2 (2018E)
• Net Profit: 65.4 (2017E), 79.9 (2018E)

Compliance and Disclaimer

• The analyst did not hold any shares or convertible debt in the company as of Nov 13, 2017.
• Samsung Securities' holdings in the company would not exceed 1% of outstanding shares if convertible debt were exercised.
• The report is not an offer or solicitation to buy or sell securities.
• No guarantees are made regarding the accuracy or completeness of the information.
• Investment advice is not provided, and independent decisions are required.

Investment Ratings

• BUY: Expected to increase in value by 10% or more within 12 months and be highly attractive within the sector.
• HOLD: Expected to increase or decrease in value by less than 10% within 12 months.
• SELL: Expected to decrease in value by 10% or more within 12 months.

Global Disclosures

• The report is for information purposes only and does not provide individually tailored investment advice.
• It may not be reproduced, distributed, or transmitted without prior written permission.
• The report is not intended for retail investors in the U.S., UK, Singapore, or Korea, and is restricted to institutional investors or relevant persons.

Analyst Certification

• The report reflects the personal views of the analyst.
• The analyst's compensation is not directly tied to the recommendations or views in the report.