Hanwha Chemical(009830): Focus on value
- 3Q06 comment
- Maintain BUY and TP of KRW16,000
> We maintain our TP of KRW16,000 on Hanwha Chemical, though we think the company deserves fair price of KRW20,000 based on estimated FY07E earnings.
> The company’s investment assets(KRW1,440.5bn based on 2006) are much more substantial than operating assets(KRW942.2bn).
> Net borrowings have declined noticeably from KRW1,391.4bn in 2000 to KRW622.4bn(E) in 2006. In return, shareholders’ value increased significantly.
> Because of characteristic of polymer business, Hanwha Chemical’s EBITDA tends to stay stable relative to that of a basic distillate maker.
> Expected downward stabilization of oil and ethylene prices will, therefore, boost the company’s earnings. |
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