Hanwha Group Vice Chairman Kim Dong-kwan delivers a speech at the company's solar module factory in the U.S. state of Georgia in this April 2023 file photo. Courtesy of Hanwha Solutions

Hanwha Solutions suffered a sharp decline in its stock price throughout last week, as skepticism has been growing over its business portfolios embracing renewables, chemical and materials, according to securities analysts, Sunday.

After the company announced a 34.6 percent drop in its 2023 operating profit, Thursday, its stock price plunged 10.67 percent from the previous session. The share price suffered an additional 8.19 percent fall on Friday resulting in the lowest closing price since July 2020.

Even before Hanwha Solutions announced its 2023 earnings, the stock price had fallen for three consecutive trading sessions from Monday. The company was expected to face worsening profits from its renewables and chemical businesses as a result of the oversupply of Chinese solar modules and petrochemical products.

Hanwha Solutions admitted that its renewable energy business will suffer losses and that its chemical business will continue to post an operating loss during the first quarter of this year.

After Hanwha Solutions revealed that the company's fourth-quarter profit from its advanced materials business also fell from the previous quarter, investors moved to sell their shares, despite the company's plan to pay dividends for the first time in four years.

"Due to the weak earnings of its solar panel and chemical businesses, it will be difficult for Hanwha Solutions to improve its revenue in a short period of time," DS Investment & Securities analyst Ahn Joo-won said. "The performance of its advanced materials business is not good enough to improve the companywide earnings."

At least 12 domestic securities analysts lowered their stock price target for Hanwha Solutions due to expectations that the company will suffer an operating loss during the first quarter.

Most of them also downgraded their investment recommendation for Hanwha Solutions from "buy" to "hold," which is virtually seen as "sell," given that domestic securities firms remain reluctant to be outspoken in advising investors to sell their shares in large companies.

Hanwha Solutions' solar module factory is under construction in the U.S. state of Georgia in this undated file photo. Courtesy of Hanwha Solutions

Hanwha Solutions seeks a turnaround in its earnings by taking advantage of the U.S. tax incentives in accordance with the Inflation Reduction Act. However, Kiwoom Securities analyst Chung Kyung-hee warned of possible changes in the act after the U.S. presidential election later this year.

In addition, Korea's implementation of the OECD's global minimum corporate tax initiative is expected to limit tax benefits for Hanwha Solutions, because the new system forces parents of multinational companies to pay additional taxes if their foreign subsidiaries pay corporate taxes falling short of 15 percent of their earnings.

Industry officials are wondering whether Hanwha Group Vice Chairman Kim Dong-kwan will be able to find the answer to cope with the current difficulties, through his trip to the U.S. next month. He will reportedly attend the CERAWeek energy conference in Texas and meet the heads of global energy companies there.