Hanwha Corp.
(000880 KS)
Companies
Holdings
Negatives priced in; Positives yet to be reflected
Maintain Buy call with TP of W42,000
We maintain our Buy call on Hanwha Corp. with a target price of W42,000. Hanwha
Corp.Ês shares are trading at a deep discount (44.7%) to the companyÊs net asset
value (vs. its discount band of 25~40%). We attribute this to the sluggishness of
Hanwha ChemicalÊs (a subsidiary) shares. However, downside risk for Hanwha
ChemicalÊs shares appears minimal, given that their trading P/B has fallen to 0.8x.
Furthermore, Hanwha Chemical is likely to show earnings improvements in light of
an expected rise in PVC prices in 2H and rapid loss reductions at Hanwha SolarOne (a
subsidiary of Hanwha Chemical). As such, any fall in Hanwha Corp.Ês net asset value
(due to a drop in investment asset value) should be limited. And the stock will likely
appreciate, given its valuation merits and the growth potential of in-house operations
and Hanwha E&C (a wholly-owned subsidiary).
2Q Review: Pretax profit missed forecasts due to a drop in equity-method gains
For 2Q, Hanwha Corp. posted revenues of W2.87tr (up 6.3% QoQ; down 3.3%
YoY) and an operating profit of W91.9bn (up 15.8% QoQ; down 16.0% YoY), under
consolidated K-IFRS. Pretax profit came in at W101.1bn (down 2.9% QoQ; down
44.5% YoY), missing both our estimate and the consensus.
In the quarter, Hanwha E&C incurred YoY margin deterioration due to a decline in
margins at the housing unit as well as an increase in the proportion of public
project-related revenues (out of its overall revenues). However, Hanwha Hotels & Resorts
swung to positive QoQ, driven by a higher hotel room turnover rate (following
renovations) and room rate hikes. Meanwhile, 2Q equity-method gains plunged 22.1%
QoQ to W71bn, as Hanwha Chemical swung to a pretax loss of W17.2bn (despite loss
reductions at Hanwha SolarOne), hurt by equity-method losses from Yeochun NCC.
Value of Hanwha E&C to rise
In May, Hanwha E&C signed a formal contract with the National Investment
Commission (NIC; an Iraqi government agency) to build 100,000 housing units in
Bismayah (a new city neighboring Baghdad). This seven-year project is worth a
whopping US$7.75bn. As this project will be funded by the Iraqi government and
presale proceeds, we believe the financial risks are limited. Furthermore, Hanwha
E&C will perform construction work only upon advance payment. And any delays in
payment would permit Hanwha E&C to suspend construction.
With Ramadan ending, we believe that Hanwha E&C is likely to receive advance
payments sometime soon and begin construction. As such, we anticipate the builder
to show full-swing top-line growth going forward. We believe that the resulting
re-rating of Hanwha E&C should provide a big boost to Hanwha Corp.Ês shares.
Daewoo Securities Co., Ltd.
Dae-ro Jeong +822-768-4160 [email protected]
Buy
(Maintain)
Target Price (12M, W) 42,000 Share Price (08/23/12, W) 31,400 Expected Return (%) 33.8 EPS Growth (12F, %) 167.5 Market EPS Growth (12F, %) 14.1P/E(12F, x) 6.6
Market P/E(12F, x) 10.3
KOSPI 1,942.54
Market Cap (Wbn) 2,354
Shares Outstanding (mn) 75 Avg Trading Volume (60D, '000) 191 Avg Trading Value (60D, Wbn) 5 Dividend Yield (12F, %) 1.4
Free Float (%) 55.9
52-Week Low 25,850
52-Week High 41,700
Beta (12M, Daily Rate of Return) 1.15 Price Return Volatility (12M Daily, %,SD) 2.2 Foreign Ownership (%) 21.2 Major Shareholder(s)
Kim Seung Yeon, et al. (36.23%) Treasury shares (7.84%) NPS (7.17%) Price Performance (%) 1M 6M 12M Absolute 15.9 -14.8 -10.2 Relative 7.3 -11.5 -19.5 Key Business
Engaging in in-house operations, trading, wholesale and retail sales.
50 60 70 80 90 100 110 120 8/11 12/11 4/12 8/12 Share price KOSPI
§ Earnings & Valuation Metrics
FY Revenues OP OP Margin NP EPS EBITDA FCF ROE P/E P/B EV/EBITDA
(Wbn) (Wbn) (%) (Wbn) (W) (Wbn) (Wbn) (%) (X) (X) (X) 12/10 14,472 464 3.2 1,149 15,232 657 -27,696 33.2 3.1 0.8 13.4 12/11 12,186 314 2.6 135 1,783 430 45 2.9 18.6 0.6 18.0 12/12F 12,261 355 2.9 334 4,771 458 134 7.4 6.6 0.5 16.4 12/13F 13,205 412 3.1 380 5,977 524 227 8.7 5.3 0.5 15.7 12/14F 14,225 506 3.6 449 6,894 623 299 9.3 4.6 0.4 14.4 Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, KDB Daewoo Securities Research estimates
2Q Review: Pretax profit missed forecasts due to a drop in equity-method gains
For 2Q, Hanwha Corp. posted revenues of W2.87tr (up 6.3% QoQ; down 3.3% YoY) and an
operating profit of W91.9bn (up 15.8% QoQ; down 16.0% YoY), under consolidated K-IFRS.
Pretax profit came in at W101.1bn (down 2.9% QoQ; down 44.5% YoY), missing both our
estimate and the consensus. Although the companyÊs in-house operations and major
subsidiaries (which are included in consolidated numbers) showed healthy results, a decline
in equity-method gains dragged down the companyÊs 2Q pretax profit.
In the quarter, Hanwha E&C incurred YoY margin deterioration due to a decline in margins at
the housing unit as well as an increase in the proportion of public project-related revenues
(out of its overall revenues). However, Hanwha Hotels & Resorts swung to positive QoQ,
driven by a higher hotel room turnover rate (following renovations) and room rate hikes.
In-house operations delivered QoQ earnings improvement, aided by strong manufacturing
operations. Operating profit at in-house units expanded 31.8% YoY to W31.5bn.
Meanwhile, 2Q equity-method gains plunged 22.1% QoQ to W71bn, as Hanwha Chemical
swung to a pretax loss of W17.2bn (despite loss reductions at Hanwha SolarOne), hurt by
equity-method losses from Yeochun NCC.
Table 1. Earnings review (Wbn, %)
2Q12P Growth
2Q11 1Q12
Actual KDB Daewoo Consensus QoQ YoY
Revenues 2,967.2 2,700.7 2,869.7 2,905.9 2,962.1 6.3 -3.3
Operating profit 109.4 79.3 91.9 94.4 99.3 15.8 -16.0
Net profit 140.6 84.6 76.8 79.0 78.3 -9.2 -45.4
OP margin 3.7 2.9 3.2 3.2 3.4 0.3 -0.5
Net profit 4.7 3.1 2.7 2.7 2.6 -0.5 -2.1
Source: KDB Daewoo Securities Research
Table 2. Earnings forecast revisions (Wbn, %, %p)
Previous Revised Growth
2012F 2013F 2012F 2013F 2012F 2013F Revenues 12,717 13,717 12,261 13,205 -3.6 -3.7 Operating profit 359 424 355 412 -1.3 -2.9 Net Profit 301 391 337 388 11.9 -0.7 OP margin 2.8 3.1 2.9 3.1 0.1 0.0 NP margin 2.2 2.3 2.7 2.9 0.6 0.6
Source: KDB Daewoo Securities Research
Table 3. Quarterly earnings trend of Hanwha Corp. by division (Wbn, %, %p)
2011 2012F FY2Q12
1Q 2Q 3Q 4Q Annual 1Q 2QP 3Q 4QF Annual QoQ YoY
Revenues 1,343.6 1,246.3 1,314.2 1,522.8 5,426.9 1,352.0 1,366.0 1,370.0 1,622.3 5,710.3 1.0 9.6 Manufacturing 184.0 200.3 242.4 414.4 1,041.1 232.8 237.1 284.9 496.6 1,251.4 1.8 18.4 Trade 1,098.6 1,021.6 1,060.3 1,106.3 4,286.8 1,106.8 1,118.4 1,072.8 1,123.9 4,421.9 1.0 9.5
Eco Metro 61.0 24.4 11.5 2.1 99.0 12.4 10.5 12.3 1.8 37.0 -15.3 -57.0
Operating profit 39.6 23.9 29.5 33.6 126.1 30.3 31.5 46.0 59.2 167.0 4.0 31.8
In-house operations and
major consolidated
subsidiaries showed
healthy results;
Equity-method gains declined
KDB Daewoo Securities Research
Table 4. Quarterly earnings trends of Hanwha Corp. and its core subsidiaries (Wbn, %, %p)
2011 2012F FY12 2Q
1Q 2Q 3Q 4Q Annual 1Q 2QP 3Q 4QF Annual QoQ YoY
Hanwha Corp. Revenues 1,343.6 1,246.3 1,314.2 1,522.8 5,426.9 1,352.0 1,366.0 1,370.0 1,622.3 5,710.2 1.0 9.6 OP 39.6 23.8 29.6 33.6 126.6 30.3 31.5 46.0 59.2 167.0 3.9 32.2 OP margin 2.9 1.9 2.3 2.2 2.3 2.2 2.3 3.4 3.6 2.9 0.1 0.4 Hanwha E&C Revenues 601.9 712.6 647.3 783.5 2,745.2 633.5 678.7 686.1 886.6 2,884.9 7.1 -4.8 OP 39.3 34.6 59.0 44.6 177.5 39.8 31.5 56.9 49.6 177.9 -20.9 -9.0 OP margin 6.5 4.9 9.1 5.7 6.5 6.3 4.6 8.3 5.6 6.2 -1.6 -0.2
Hanwha hotel & resort
Revenues 189.8 225.3 247.6 248.2 911.0 212.2 248.6 279.9 293.2 1,033.8 17.2 10.4 OP -1.0 12.5 18.2 12.9 42.6 -0.9 14.0 21.0 15.5 49.6 - 12.0 OP margin -0.5 5.6 7.3 5.2 4.7 -0.4 5.6 7.5 5.3 4.8 6.1 0.1 Hanwha TechM Revenues 93.3 107.2 95.3 127.3 423.1 78.4 104.0 126.4 131.0 439.8 32.7 -3.0 OP 15.0 9.5 6.2 4.1 34.8 5.2 7.5 7.7 3.9 24.3 44.2 -21.1 OP margin 16.1 8.9 6.5 3.2 8.2 6.6 7.2 6.1 3.0 5.5 0.6 -1.7
Maintain Buy call with TP of W42,000
We maintain our Buy call on Hanwha Corp. with a target price of W42,000. Hanwha Corp.Ês
shares are trading at a deep discount (44.7%) to the companyÊs net asset value (vs. its
discount band of 25~40%). We attribute this to the sluggishness of Hanwha ChemicalÊs (a
subsidiary) shares. However, downside risk for Hanwha ChemicalÊs shares appears minimal,
given that their trading P/B has fallen to 0.8x. Furthermore, Hanwha Chemical is likely to
show earnings improvements in light of an expected rise in PVC prices in 2H and rapid loss
reductions at Hanwha SolarOne (a subsidiary of Hanwha Chemical).
As such, any fall in Hanwha Corp.Ês net asset value (due to a drop in investment asset value)
should be limited. And the stock will likely appreciate, given its valuation merits and the
growth potential of in-house operations and Hanwha E&C (a wholly-owned subsidiary).
Figure 1. NAV, market cap and discount rate trends of Hanwha Corp.Source: KDB Daewoo Securities Research
Downside risks for
Hanwha ChemicalÊs
shares appear minimal
considering trading P/B
of 0.8x
Shares of Hanwha Corp.
to appreciate, given the
growth potential of
in-house operations and
Hanwha E&C
0 1 2 3 4 5 6 7 3/10 6/10 9/10 12/10 3/11 6/11 9/11 12/11 3/12 6/12 Stake in Hanwha ChemicalHanwha Corp.'s NAV Hanwha Corp.'s market cap (Wtr) 0 10 20 30 40 50 60 3/10 6/10 9/10 12/10 3/11 6/11 9/11 12/11 3/12 6/12 NAV discount rate
KDB Daewoo Securities Research
Table 5. Calculation of target price for Hanwha Corp. (Wbn)
Value Remarks
1. Present value of future income 2,023
Value of in-house operations 1,670 10.0x 2012F EBIT
Real estate 353 Fair value
2. Investment asset value 4,124
Listed subsidiaries 2,585 Based on market value Non-listed subsidiaries 1,539 Based on book value 3. Total asset value (1+2) 6,148
4. Net borrowings (-) 2,071 End-2Q 2012
Treasury shares (+) 185
5. NAV (3-4) 4,261
Market cap. 2,359 Including treasury shares
Discount rate 44.7
6. No. of shares (Â000) 69,558 Free float
7. NAV per share (W) 61,263
8. Target price (W) 42,000
Current price (W) 31,400 As of August 27, 2012
Upside potential (%) 33.8
Source: KDB Daewoo Securities Research
Table 6. Estimated value of investment securities (Wbn)
% of stake Book value Current price Value Remarks
Listed subsidiaries 2,585 Based on market value
Korea Life Insurance 21.7% 835 7,670 1,446
Hanwha Chemical 37.9% 1,091 21,450 1,139
Non-listed subsidiaries 1,539 Based on book value
Hanwha Hotel & Resort 50.6% 219 219
Hanwha E&C 100.0% 1,059 1,059
Hanwha TechM 100.0% 83 83
Source: KDB Daewoo Securities Research
Figure 2. NAV contribution for Hanwha Corp. Figure 3. Share performances of Hanwha Corp. and its core subsidiaries
Source: KDB Daewoo Securities Research Source: KDB Daewoo Securities Research
In-house
operations, 32.9% Korea Life, 23.5%
Hanwha Chemical, 18.5% Hanwha E&C, 17.2% Others, 7.8% 40 60 80 100 120 140 160 180 1/11 4/11 7/11 10/11 1/12 4/12 7/12 Hanwha Corp. Korea Life Hanwha Chemical (1/1/11=100)
Value of Hanwha E&C to rise
In May, Hanwha E&C signed a formal contract with the National Investment Commission
(NIC; an Iraqi government agency) to build 100,000 housing units in Bismayah (a new city
neighboring Baghdad). Hanwha E&C will manage the entire process (e.g., designing,
procuring, and building). This seven-year project is worth a whopping US$7.75bn.
In light of the political and economic uncertainties in Iraq, all projects must be carefully
vetted for financing soundness before being taken on. The financial risks for this housing
project appear limited in our opinion, as it will be funded by the Iraqi government and presale
proceeds. Furthermore, Hanwha E&C will perform construction work only upon advance
payment. And any delays in payment would permit Hanwha E&C to suspend construction.
With Ramadan ending, we believe that Hanwha E&C is likely to receive advance payments
sometime soon and begin construction. As such, we anticipate the builder to show
full-swing top-line growth going forward. We believe that the resulting re-rating of Hanwha E&C
should provide a big boost to Hanwha Corp.Ês shares.
Table 7. Bismayah New City Project Overview
Project Bismayah New City Project
Scale 100,000 housing units and infrastructure (roads, water, and sewage facilities) Period 7 years (2 years for precast concrete plants: 5 years for housing units) Amount US$7.75bn (+ inflation adjustment)
Contractee NIC (National Investment Commission) Area Bismayah, 25 km southeast of Baghdad Land area 18,300,000㎡
Payment schedule
Advanced payments (25%) - Contract payments: 10% - Intermediate payments: 15%
Payment made based on progression of project Source: Company data, KDB Daewoo Securities Research
Figure 4. Hanwha E&CÊs order backlogs Figure 5. Hanwha E&CÊs overseas new order trend
In May, Hanwha E&C
was contracted to build
100,000 housing units in
a new city neighboring
Baghdad
Advance payments are
imminent; Re-rating of
Hanwha E&C to boost
Hanwha Corp.Ês shares.
3.3 4.0 5.8 7.0 8.6 9.0 11.2 10.9 0 2 4 6 8 10 12 05 06 07 08 09 10 11 3/12 (Wtr) 482 34 1,366 552 1,560 8,761 0 2000 4000 6000 8000 10000 07 08 09 10 11 12F (Wbn)
Bismayah New City Project (US$7.75bn)
KDB Daewoo Securities Research
Hanwha (000880 KS/Buy/TP: W42,000)
Comprehensive Income Statement (Summarized) Statement of Financial Condition (Summarized)
(Wbn) 12/11 12/12F 12/13F 12/14F (Wbn) 12/11 12/12F 12/13F 12/14F
Revenues 12,186 12,261 13,205 14,225 Current Assets 4,853 4,893 6,023 6,125
Cost of Sales 11,267 11,210 12,099 13,001 Cash and Cash Equivalents 351 1,412 1,942 2,081 Gross Profit 919 1,051 1,106 1,224 AR & Other Receivables 3,052 2,217 2,466 2,572
SG&A Expenses 614 662 657 678 Inventories 888 625 938 754
Operating Profit (Adj) 305 389 449 546 Other Current Assets 510 582 620 661
Operating Profit 314 355 412 506 Non-Current Assets 10,177 11,405 12,619 13,871
Non-Operating Profit -17 108 109 173 Investments in Associates 5,811 5,848 5,939 6,031 Net Financial Income 0 0 0 0 Property, Plant and Equipment 3,063 3,241 3,401 3,538
Net Gain from Inv in Associates 239 349 371 391 Intangible Assets 209 197 235 264
Pretax Profit 296 430 497 588 Total Assets 15,030 16,297 18,642 19,995
Income Tax 203 93 109 129 Current Liabilities 5,748 5,189 5,522 5,695
Profit from Continuing Operations 94 337 388 459 AP & Other Payables 2,016 1,569 1,769 1,905 Profit from Discontinued Operations 0 0 0 0 Short-Term Financial Liabilities 2,598 2,480 2,525 2,467
Net Profit 94 337 388 459 Other Current Liabilities 1,134 1,141 1,229 1,323
Controlling Interests 135 334 380 449 Non-Current Liabilities 4,223 5,740 7,345 8,047 Non-Controlling Interests -41 3 8 10 Long-Term Financial Liabilities 2,391 3,452 4,652 5,563 Total Comprehensive Profit -6 342 438 509 Other Non-Current Liabilities 1,551 2,007 2,412 2,203
Controlling Interests 56 338 429 498 Total Liabilities 9,971 10,928 12,866 13,742
Non-Controlling Interests -62 4 9 11 Controlling Interests 4,686 4,992 5,389 5,856
EBITDA 430 458 524 623 Capital Stock 377 377 377 377
FCF (Free Cash Flow) 45 134 227 299 Capital Surplus 400 400 400 400
EBITDA Margin (%) 3.5 3.7 4.0 4.4 Retained Earnings 3,937 4,267 4,686 5,175
Operating Profit Margin (%) 2.6 2.9 3.1 3.6 Non-Controlling Interests 373 377 386 397 Net Profit Margin (%) 1.1 2.9 3.4 3.7 Stockholders' Equity 5,059 5,369 5,776 6,253
Cash Flows (Summarized) Forecasts/Valuations (Summarized)
(Wbn) 12/11 12/12F 12/13F 12/14F 12/11 12/12F 12/13F 12/14F
Cash Flows from Op Activities 645 1,506 469 512 P/E (x) 18.6 6.6 5.3 4.6
Net Profit 296 382 459 530 P/CF (x) 9.6 5.5 4.5 4.0
Non-Cash Income and Expense 267 90 65 93 P/B (x) 0.6 0.5 0.5 0.4
Depreciation 112 52 52 50 EV/EBITDA (x) 18.0 16.4 15.7 14.4
Amortization 13 17 23 27 EPS (W) 1,783 4,771 5,977 6,894
Others -101 -37 85 82 CFPS (W) 3,438 5,678 6,968 7,913
Chg in Working Capital 251 1,117 75 39 BPS (W) 60,265 63,774 68,533 74,341
Chg in AR & Other Receivables -210 322 -250 -105 DPS (W) 450 450 450 450
Chg in Inventories -116 263 -312 184 Payout ratio (%) 23.3 8.7 7.0 6.0
Chg in AP & Other Payables 165 -469 200 137 Dividend Yield (%) 1.4 1.4 1.4 1.4
Income Tax Paid -170 -83 -129 -149 Revenue Growth (%) -15.8 0.6 7.7 7.7
Cash Flows from Inv Activities -294 -1,083 -867 -887 EBITDA Growth (%) -34.6 6.5 14.4 18.9 Chg in PP&E -271 -250 -212 -187 Operating Profit Growth (%) -32.4 13.1 16.2 22.8
Chg in Intangible Assets -40 -58 -61 -55 EPS Growth (%) -88.3 167.5 25.3 15.3
Chg in Financial Assets -164 -976 -843 -913 Accounts Receivable Turnover (x) 4.6 4.8 5.9 5.9
Others 180 201 249 268 Inventory Turnover (x) 14.9 16.2 16.9 16.8
Cash Flows from Fin Activities -207 707 928 514 Accounts Payable Turnover (x) 7.6 7.6 8.9 8.6
Chg in Financial Liabilities 111 -120 45 -58 ROA (%) 0.7 2.3 2.6 2.7
Chg in Equity 0 0 0 0 ROE (%) 2.9 7.4 8.7 9.3
Dividends Paid -42 -31 -31 -31 ROIC (%) 2.5 8.6 11.1 13.0
Others -276 -285 -286 -308 Liability to Equity Ratio (%) 197.1 203.5 222.8 219.8
Increase (Decrease) in Cash 133 1,129 530 139 Current Ratio (%) 84.4 94.3 109.1 107.5 Beginning Balance 218 351 1,480 2,010 Net Debt to Equity Ratio (%) 90.7 83.1 89.6 94.2
Ending Balance 351 1,480 2,010 2,149 Interest Coverage Ratio (x) 1.1 1.3 1.4 1.6
Disclosures
As of the publication date, Daewoo Securities Co., Ltd and/or its affiliates do not have any special interest with the subject company and do not own 1% or more of the subject company's shares outstanding.
Buy Relative performance of 20% or greater
Trading Buy Relative performance of 10% or greater, but with volatility Hold Relative performance of -10% and 10%
Stock Ratings
Sell Relative performance of -10% Overweight Fundamentals are favorable or improving
Neutral Fundamentals are steady without any material changes Industry
Ratings
Underweight Fundamentals are unfavorable or worsening
* Ratings and Target Price History (Share price (----), Target price (----), Not covered (■), Buy (▲), Trading Buy (■), Hold (●), Sell (◆)) * Our investment rating is a guide to the relative return of the stock versus the market over the next 12 months.
* Although it is not part of the official ratings at Daewoo Securities, we may call a trading opportunity in case there is a technical or short-term material development. * The target price was determined by the research analyst through valuation methods discussed in this report, in part based on the analystÊs estimate of future earnings.
The achievement of the target price may be impeded by risks related to the subject securities and companies, as well as general market and economic conditions.
Analyst Certification
The research analysts who prepared this report (the „Analysts‰) are registered with the Korea Financial Investment Association and are subject to Korean securities regulations. They are neither registered as research analysts in any other jurisdiction nor subject to the laws and regulations thereof. Opinions expressed in this publication about the subject securities and companies accurately reflect the personal views of the Analysts primarily responsible for this report. Daewoo Securities Co., Ltd. policy prohibits its Analysts and members of their households from owning securities of any company in the AnalystÊs area of coverage, and the Analysts do not serve as an officer, director or advisory board member of the subject companies. Except as otherwise specified herein, the Analysts have not received any compensation or any other benefits from the subject companies in the past 12 months and have not been promised the same in connection with this report. No part of the compensation of the Analysts was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report but, like all employees of Daewoo Securities, the Analysts receive compensation that is impacted by overall firm profitability, which includes revenues from, among other business units, the institutional equities, investment banking, proprietary trading and private client division. At the time of publication of this report, the Analysts do not know or have reason to know of any actual, material conflict of interest of the Analyst or Daewoo Securities Co., Ltd. except as otherwise stated herein.
Disclaimers
This report is published by Daewoo Securities Co., Ltd. („Daewoo‰), a broker-dealer registered in the Republic of Korea and a member of the Korea Exchange. Information and opinions contained herein have been compiled from sources believed to be reliable and in good faith, but such information has not been independently verified and Daewoo makes no guarantee, representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information and opinions contained herein or of any translation into English from the Korean language. If this report is an English translation of a report prepared in the Korean language, the original Korean language report may have been made available to investors in advance of this report. Daewoo, its affiliates and their directors, officers, employees and agents do not accept any liability for any loss arising from the use hereof. This report is for general information purposes only and it is not and should not be construed as an offer or a solicitation of an offer to effect transactions in any securities or other financial instruments. The intended recipients of this report are sophisticated institutional investors who have substantial knowledge of the local business environment, its common practices, laws and accounting principles and no person whose receipt or use of this report would violate any laws and regulations or subject Daewoo and its affiliates to registration or licensing requirements in any jurisdiction should receive or make any use hereof. Information and opinions contained herein are subject to change without notice and no part of this document may be copied or reproduced in any manner or form or redistributed or published, in whole or in part, without the prior written consent of Daewoo. Daewoo, its affiliates and their directors, officers, employees and agents may have long or short positions in any of the subject securities at any time and may make a purchase or sale, or offer to make a purchase or sale, of any such securities or other financial instruments from time to time in the open market or otherwise, in each case either as principals or agents. Daewoo and its affiliates may have had, or may be expecting to enter into, business relationships with the subject companies to provide investment banking, market-making or other financial services as are permitted under applicable laws and regulations. The price and value of the investments referred to in this report and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur.
Important Disclosures & Disclaimers
Hanwha 0 20,000 40,000 60,000 80,000 8/10 2/11 8/11 2/12 8/12 (W)
KDB Daewoo Securities Research
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Daewoo Securities Co. Ltd. (Seoul) Daewoo Securities (Hong Kong) Ltd. Daewoo Securities (America) Inc.
Head Office
34-3 Yeouido-dong, Yeongdeungpo-gu Seoul 150-716
Korea
Two International Finance Centre Suites 2005-2012
8 Finance Street, Central Hong Kong
600 Lexington Avenue Suite 301
New York, NY 10022 United States
Tel: 82-2-768-3026 Tel: 85-2-2514-1304 Tel: 1-212-407-1022
Daewoo Securities (Europe) Ltd. Tokyo Representative Office Beijing Representative Office
Tower 42, Level 41 25 Old Broad Street London EC2N 1HQ United Kingdom
7th Floor, Yusen Building 2-3-2 Marunouchi, Chiyoda-ku Tokyo 100-0005
Japan
Suite 2602, Twin Towers (East) B-12 Jianguomenwai Avenue Chaoyang District, Beijing 100022 China
Tel: 44-20-7982-8016 Tel: 81-3- 3211-5511 Tel: 86-10-6567-9699
Shanghai Representative Office Ho Chi Minh Representative Office
Unit 13, 28th Floor, Hang Seng Bank Tower
1000 Lujiazui Ring Road
Pudong New Area, Shanghai 200120 China
Centec Tower
72-74 Nguyen Thi Minh Khai Street Ward 6, District 3, Ho Chi Minh City Vietnam
Tel: 86-21-5013-6392 Tel: 84-8-3910-6000
