RAM Ratings assigns final AAA(fg)/Stable rating to Hanwha Q CELLS’ proposed MTN

Published on 10 Sep 2021.

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RAM Ratings has assigned a final rating of AAA(fg)/Stable to Hanwha Q CELLS Malaysia Sdn Bhd’s (HQC) proposed RM150 mil Guaranteed Medium-Term Notes (2021/2024) (proposed MTN). In doing so, we have reviewed all relevant transaction documents and find them to be in line with our expectations when the preliminary rating was assigned (published on 30 July 2021). 

The rating reflects the credit enhancement provided to the notes by an irrevocable and unconditional guarantee from Credit Guarantee Investment Facility (CGIF, rated AAA/P1 by RAM). 

HQC is a manufacturer of solar photovoltaic (PV) cells and modules in Malaysia, with respective production capacities of 2.11 GW and 1.84 GW as at end-December 2020. HQC is indirectly wholly owned by Hanwha Q CELLS Co. Ltd (Hanwha Q CELLS), the solar arm of Hanwha Solutions Corporation (the Group). Based in South Korea, with operations worldwide, the Group is also involved in the chemicals and advanced materials sectors among others.

Excluding the guarantee, HQC’s credit profile is strong, considering its very close relationship with Hanwha Solutions. HQC is a key manufacturing and research and development arm of Hanwha Q CELLS, and rides on its parent’s renowned product technology and solid branding. Among the 10 largest PV module manufacturers globally, Hanwha Q CELLS is the top player in several advanced countries. HQC’s products are mostly sold internally, with quantities typically fixed and the selling price marked up at a given rate to production cost. As such, HQC’s operating profit before depreciation, interest and tax margin has been fairly stable, with debt coverage adequate.

Moderating HQC’s credit profile is a highly leveraged balance sheet and weak liquidity profile. HQC’s business viability depends on Hanwha Solutions’ ability to maintain its market position in the competitive global solar PV sector. Players are exposed to obsolescence risk and changes in government renewable energy targets. The Group is also vulnerable to the prices of raw materials, particularly polysilicon. 

Hanwha Solutions’ credit profile is sound on account of its strong position within the global solar sector and the South Korean petrochemical sector, as well as its diversified presence globally. Its balance sheet is healthy and debt coverage adequate. However, the Group’s ambitious plans for its solar business and new hydrogen ventures balance these strengths, as does its exposure to the solar market and volatile petrochemical sector. Hanwha Solutions’ evolving corporate structure due to various corporate exercises in recent years further constrains analysis. 


Analytical contacts
Karin Koh, CFA
(603) 3385 2508

Chong Van Nee, CFA
(603) 3385 2482


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
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