Renewable energy-related stocks, including Hanwha Solutions, are weak in early trading on the 23rd. The downturn in investor sentiment is interpreted as a reaction to potential economic impacts if a revision to the U.S. Inflation Reduction Act (IRA), which centers on reducing the tax credit for clean energy, is passed.
As of 9:09 a.m. on that day, Hanwha Solutions is trading at 30,150 won, down 3,150 won (9.46%) from the previous trading day. The preferred shares of Hanwha Solutions are down 9.54% at the same time.
Other renewable energy-related stocks have also seen declines, such as CS WIND (-6.32%), SK oceanplant (-5.43%), and OCI Holdings (-1.78%).
Overnight, a tax cut bill that significantly reduces the tax credit for clean energy implemented through the Inflation Reduction Act (IRA) passed the U.S. House of Representatives.
This bill significantly accelerated the timeline for the elimination of tax credits related to the production of clean power without carbon emissions, such as solar, wind, and geothermal. To qualify for these credits, construction must begin within 60 days after the law's enactment and operations must start by the end of 2028. As a result, concerns about the performance of renewable energy-related stocks have increased.
Hana Securities lowered its target price for Hanwha Solutions from 50,000 won to 40,000 won on this day. Researcher Yoon Jae-sung from Hana Securities noted, "If we assume the passage of the IRA bill, it is necessary to simultaneously lower expectations for the growth rate of the U.S. solar market and the long-term outlook for the solar power lending business (TPO). Although TPO-related revenue will be generated from facilities that are already under construction, the change in this year's operating profit estimate will not be significant. However, I proactively lowered the target price to conservatively reflect next year's estimates."