Good afternoon, I am Han Sang-yoon, Head of IR at Hanwha Solutions. Thank you all for joining Hanwha Solutions' conference call for the first quarter 2026 earnings.

Also joining the call, we have EJ Jae-Bin, Head of Finance Office; Kim Tae-hong, Head of Qcells Strategy Office; Kim Sung-goo, Head of Planning at Chemical Division; Roh Hyun-dong, Head of Planning at Insight Division; and Kim Woo-seok, Head of Planning at Hanwha Advanced Materials. We will first present the financial performance, business updates, and outlook by segment and conclude with a Q&A.

Now, we will begin with the Q1 business performance and financial highlights.

Good afternoon, I am EJ Jae-Bin, Head of Finance Office at Hanwha Solutions. Let me report to you on the business performance and financial status.

First, Q1 2026 performance. Please turn to page 8 of the presentation.

On a consolidated basis for Q1 2026, the company recorded revenue of 3 trillion 882 billion won, operating profit of 92.6 billion won, a pre-tax loss of 42.4 billion won, and a net loss of 80— 38.2 billion won. Revenue increased by about 3% Q-on-Q, and operating profit turned positive on a consolidated basis, driven by a return to profitability across key segments, including Renewable Energy, Chemical, and Advanced Materials.

In Q1, AMPC of 218 billion won was recognized. Please refer to the bottom of page 8 for performance by segment.

Next, on financials. Please turn to page 9.

Total assets increased by 1 trillion 786.3 billion won from the year-end to 34 trillion 930.3 billion won, and cash and cash equivalents decreased by 188.4 billion won to 2 trillion 477.4 billion won. As of Q1 2026, total liability rose by 973.6 billion won to 22 trillion 932.6 billion won.

Total debt increased by 764.9 billion won to 16 trillion 46.6 billion won, and net debt increased by 943.3 billion won to 13 trillion 569.2 billion won. Total equity increased by 812.7 billion won from year-end to 11 trillion 997.7 billion won.

The total liabilities-to-equity ratio is 191%, and the net debt-to-equity ratio is 133%. Now, each division will present from page 10 and onwards.

Good afternoon, I am Kim Tae-hong, Head of Strategy Office at Qcells Division. Please turn to page 10 of the presentation.

In Q1 2026, the Renewable Energy Division recorded revenue of 2 trillion 110.9 billion won, up 3% Q-on-Q, and operating profit of 62.2 billion won, turning profitable. The performance improvement reflects not only a recovery in volumes, but also structural margin enhancements driven by recent changes in the US policy and market conditions.

Module shipment increased by 80% Q-on-Q to 1.9 gigawatts, driven by the normalization of production and sales following the resolution of cell customs clearance delays, as well as accelerated progress in EPC projects and the normalization of module supply to EPC customers. In line with higher volumes, AMPC in the first quarter increased by 112% Q-on-Q to 216.1 billion won.

Module ASP increased by about 14% Q-on-Q, driven by higher US regulations on circumvention imports from Southeast Asia and the extended application of FEOC criteria, which strengthen the price competitiveness of products based on non-FEOC supply chains. In addition, the continued tightening of the US import regulatory measures, including the ongoing Section 232 investigation, has created a favorable market environment for price increases of our products supported by local manufacturing capacity.

From a US supply-demand perspective, while total module demand exceeds 40 gigawatts annually, US-made cell production capacity, one of the key requirements to secure the additional 10% tax credit, is estimated to face a shortfall of about 10 gigawatts through early 2027, even assuming all construction and ramp-up plans in the market are fully realized. As a result, the premium for the US-made cells is expected to strengthen further, and the value of cell products manufactured at Qcells Georgia Solar Hub is anticipated to continue trending upwards for the third quarter.

In the US residential market, following last year's announcement of the OBBA, the Section 25D benefit expired at the end of last year, leading to a rapid shift in the solar financing market from a 25D-based loan model to a TPO model based on the Section 48E investment tax credit, which remains in effect through 2027. In response to this trend, we first adjusted the business mix of our in-house financing platform, EnFin, last year to 25% loans and 75% TPO, and then further increased the TPO share to approximately 96% in the first quarter of this year, enabling us to provide products aligned with the policy changes and expand our residential energy business.

In addition to the TPO business, we have also launched a new homes business leveraging California's mandate for solar installations on new residential constructions, through which we provide homebuilders with integrated offerings including supply, design, installation, and financing of solar and battery systems. By extending our market-leading channel and brand value in the residential module market, maintained since 2018, into broader energy solutions businesses such as EnFin and new homes, we are further diversifying our earnings structure.

In the utility segment, stronger FEOC regulations are leading to a fundamental reconsideration of module sourcing behavior beyond a simple pricing impact. Project financing participants, including tax equity investors, face a structural risk of losing the base ITC if FEOC eligibility is not secured, and are therefore strengthening due diligence standards to require third-party audits and legal reviews beyond supplier self-certification.

As a result, procurement by utility customers is rapidly converging toward products that comply with FEOC requirements based on verified US vertically integrated supply chains, and we are actively leveraging a compliant structure aligned with these changes. As a US-based manufacturer of modules as well as an EPC contractor, we provide customers with best-in-class procurement visibility and eligibility under the FEOC framework, thereby enhancing our competitiveness in project awards and expanding volumes.

Based on these business trends, we expect further improvement in the Renewable Energy Division in the second quarter. We plan to simultaneously drive higher sales volumes in the US residential market and the ASP increases, while increased EPC asset execution volumes and additional divestments of development assets are expected to support both revenue and profitability growth.

In particular, following the imposition of tariffs on four Southeast Asian countries last year, primarily AD/CVD, Dutch determinations covering additional circumvention manufacturing locations such as India, Indonesia, and Laos were recently announced in April, with final determinations scheduled for July. As tariff barriers on imported products are further strengthened, we expect the premium for Qcells products to become even more firmly established.

Thank you.

Next, we will hear from Chemical Division.

Good afternoon, I am Kim Sung-goo, in charge of planning at Chemical Division. Please turn to page 11 of the presentation.

In the first quarter of 2026, the Chemical segment recorded revenue of 1 trillion 340.1 billion won, up 16% Q-on-Q, and the operating profit of 34.1 billion won, returning to profit. Recent performance did reflect short-term supply-demand shifts and price increases driven by geopolitical developments in the Middle East, along with some lagging effects.

However, despite these external factors, the overall business environment remained highly volatile with constraints on profitability due to logistics disruptions and supply bottlenecks in certain regions. Nevertheless, it would be difficult to attribute the improvement in our earnings solely to one-off external factors.

We believe the current performance reflects the tangible results of the structural improvement we have consistently pursued in our business fundamentals. First, we restructured our business portfolio by rationalizing non-profitable and structurally constrained operations.

For example, we rationalized the LP3 production line, a less competitive commodity LDPE line, to proactively address potential oversupply. At the same time, we have continued our efforts to improve the earnings structure.

As a result, both our Ningbo overseas subsidiary and the TDI business, which recorded losses last year, are expected to turn profitable. In addition, further earnings improvement is expected this year through the introduction of the direct power purchase scheme, enhancement of competitiveness in the CA vinyl value chain, and a PVC portfolio strategy aimed at securing premium pricing.

In particular, the introduction of the direct power purchase scheme alone generated approximately 27 billion won in earnings improvement in the first quarter. The W&C business also improved operating profit year-on-year by expanding the share of relatively high-margin products as part of its portfolio strategy.

From a product sales perspective, we responded swiftly to changing market conditions. In the first quarter, the abolition of China's VAT rebate led to tighter supply-demand conditions in certain regions, resulting in improved market conditions, particularly for PVC and EVA.

Under these conditions, we reallocated sales towards the higher-margin markets by leveraging regional price differentials to maximize margins. In addition, for certain products such as caustic soda and PVC, we improved sales terms by capitalizing on short-term supply tightness.

In addition, from an inventory valuation perspective, the positive impact of price increases was partially reflected. Overall, the improvement in performance is not merely attributable to a cyclical market rebound, but rather the combined result of structural business improvements, enhanced cost competitiveness, and strengthened market responsiveness, and we plan to continue this trajectory going forward.

Next, Advanced Materials.

Good afternoon, I am Kim Woo-seok, Head of Planning Office at the Advanced Materials Division. Please turn to page 12.

In the fourth quarter of 2025, we recorded a loss due to one-off non-recurring expenses such as labor costs. However, in Q1 2026, operating profit turned positive, driven by improved cost structures in solar materials, the ramp-up of sales in the North American market, and the margin expansion supported by increased export volumes of lightweight composite materials and favorable foreign exchange movements.

In Q2, profitability for encapsulants and backsheet products supplied to the Qcells Georgia plant for solar modules is expected to improve further, supported by solid demand for premium modules benefiting from the domestic content fee adder. However, rising raw material prices due to the impact of the Iran conflict are expected to increase cost pressure for lightweight composite materials.

Nevertheless, we expect to maintain a stable level of profitability similar to the first quarter, supported by price pass-through and increased sales of components for electric vehicles. Lastly, on equity-method gain and loss.

Please turn to page 13. Equity-method income for Q1 2026 turned positive Q-on-Q, driven by improved performance in the petrochemical business of Hanwha Impact and better investment results.

For Q2, we expect the business conditions to be broadly similar to Q1, though volatility may arise depending on the continuation of geopolitical tensions in the Middle East. This concludes the presentation by segment, and now we will begin the Q&A.

I have four questions. The first question is, can you give us a breakdown of cell and module production capacity by each country around the time of completion of the Cartersville facility?

The second question is on guidance. With the module and other segment turning profitable, the market expectations appears to be increasing.

Please share your outlook on annual shipment guidance, as well as expected ASP trends for Q2. Also, considering the shipment volume, ASP, and increased AMPC, how much further improvement can be expected in profitability of module and other segment?

The third question is, while you mentioned an increase in residential energy in the second quarter outlook, can you provide guidance on revenue and profitability? The fourth and final question is, regarding the domestic market, the government has been emphasizing renewable energy expansion.

How does the company plan to respond in Korea?

The answer is, first, regarding the domestic market, we have historically faced intense price competition with Chinese products. However, following the abolition of VAT rebate in April, there has been increased price volatility, which supported stronger sales in Korea during the first quarter.

From a policy perspective, though domestic market has been relatively subdued in recent years, the current administration is actively considering various tax incentives and legislative measures related to domestic cell production. Accordingly, we plan to expand sales in the domestic market, and if meaningful demand is confirmed, we will consider further increasing production capacity and sales.

In addition, as the government has recently proposed various initiatives such as agrivoltaics and balcony solar, we are actively collaborating to expand overall market volume. Next, regarding residential energy and the ASP, residential energy revenue and profitability-wise, we are focused on expanding both revenue and earnings by leveraging our financing platform through the TPO model.

While it is difficult to provide a specific cent-per-watt figures, ASP increased by approximately 14% Q-on-Q in the first quarter, and we expect the upward ASP trend to continue into the second and the third quarter. Regarding the capacity breakdown after the Cartersville completion, well, capacity can be defined differently depending on whether it refers to the nameplate or effective capacity.

As previously mentioned, the total module capacity is approximately 8.5 gigawatts and cell 7.3 gigawatts. By region, Korea has around 5 gigawatts of cell capacity and approximately 2.5 gigawatts of module capacity, Malaysia about 2.4 gigawatts of cell capacity, and the US, through the Solar Hub, Cartersville, has approximately 3.3 gigawatts of integrated capacity across ingot, wafer, cell, and module respectively, while the Dalton facility has around 1.3 gigawatts of module capacity.

Regarding shipment guidance, for this year, the shipment guidance is approximately 9 gigawatts. Second quarter shipment are expected to be at a similar level to that of the first quarter.

ASP is expected to increase further in the second quarter, particularly driven by the residential segment. Full-year profitability guidance remains unchanged from what was previously communicated.

I have two questions. First is, with rising fossil fuel costs following the US-Iran conflict, demand for renewable energy is expected to increase.

While this has not yet been fully reflected in the numbers, are you seeing any tangible increase in exports by market? Has this translated into a stronger pricing power in negotiations?

The second question is regarding the new plant. You previously indicated that the ingot and wafer operation would begin in the second quarter and cell production in the third quarter.

Can you provide more specific timeline?

The answer is, with regard to the new plant's production timeline, the timing for the cell mass production remains unchanged at around the third quarter. Given the remaining variables, it is difficult to specify an exact month at this stage, please consider it as the third quarter.

Regarding the impact of the Iran conflict, the increase in the fossil fuel prices following the Iran conflict, well, this has had an impact on pricing in the US, which is our primary export market, and we are seeing an increase in demand for solar energy. That said, the growth in solar demand in the US is not driven by a single event such as the Iran conflict, but rather by broader structural factors, particularly rising electricity demand from the data centers and AI-related infrastructure, which are the main drivers of overall market growth.

I have three questions. First is, with regard to the Cartersville cell plant scheduled to start operations in the third quarter, does this imply that the utilities-related issues will be resolved by then?

Please confirm. Second question is, the competitors in the US are aggressively announcing capacity expansions of up to 100 gigawatts.

How does the company plan to navigate this environment? Is there a potential for collaboration, or do you see this as an opportunity?

The third question is with regard to the Chemical Division. There appears to be raw material procurement issues in the petrochemical business.

What is the current utilization rate overall, and how are you addressing the supply constraints? Also, given that the Middle East refining facilities have been impacted, do you expect any positive spillover effect?

The answer is, with regard to the Cartersville ramp-up in the third quarter, utilities-related issues are already in the process of being resolved. The start of the mass production in the third quarter implies that all necessary testings will be completed beforehand.

We are continuing testing from April through June and plan to begin mass production at an appropriate point in the third quarter. Second, regarding the US competition and the supply, the module manufacturing capacity in the US already exceed 60 gigawatts, which is higher than the annual installation demand.

As a result, the actual utilization rates are estimated to be below 50%. In contrast, upstream capacity across the polysilicon, ingot, wafer, and the cell remain significantly constrained.

Even if all announced projects are realized, there is still expected to be a shortfall of more than 10 gigawatts relative to the US demand. This ultimately necessitate cell imports for module production.

With the implementation of the AD/CVD measures, the role of the 4 key Southeast Asian cell supply markets, namely Vietnam, Malaysia, Thailand, and Cambodia, has diminished. As a result, imports have increasingly been shifted to alternative regions such as India, Indonesia, and Laos.

However, with the preliminary AD/CVD rulings already issued for these regions and final determinations expected in the second half, their competitiveness will also be significantly reduced.

Accordingly, while considering annual ASP trend, these structural constraints serve as a key factor that enhances our competitiveness and supports the ability to command a premium. Lastly, about the chemicals, a key feedstock, ethylene, is supplied by YNCC.

Following the Iran-related disruption in March, YNCC's operation rate declined to around 50%, close to turndown level. However, with the government support measures such as subsidies to facilitate naphtha procurement, utilization is expected to recover to approximately 65% in May and June.

In response to the reduced YNCC operations in April, we proactively imported approximately 50,000 tons of ethylene from China during April and May, which helped maintain operating rates. Excluding plants undergoing the regular turnaround maintenance, most facilities are currently operating at utilization rates above 90%.

While we are supplementing ethylene through external sourcing, supply levels remain sufficient to support stable operations. In addition, as YNCC currently relies on the Middle East for approximately 70% of its naphtha supply, we are exploring diversification towards alternative sources such as the US and Africa.

It is understood that not only the refining, but also the chemical facilities in the Middle East have been impacted. What is the scale of the impact, and to what extent can we expect any positive spillover benefits?

As mentioned earlier regarding the Middle East situation, our TDI business, which recorded a loss of approximately 40 billion won last year, is expected to turn profitable this year with the supply shortage being one of the key drivers. In particular, Sadara's plant in the Middle East has been shut down due to the impact of the conflict.

Our headquarters had a TDI production capacity of approximately 150,000 tons per year, and out of that, about 90% is exported. The rise in international prices has led to a significant improvement in the profitability, contributing the Chemical Division's return to profit.

Europe, Korea, and the US are expected to account for the majority of the solar shipment. What is the breakdown by region?

How much has the ASP increased in the US? You mentioned about 14% increase earlier.

How much further upside do you expect? Specifically, what level do you anticipate after April and May?

In terms of the module shipment mix, the US accounts for over 80%, followed by Korea and Europe. ASP varies between the residential and utility segments.

However, as a reference, residential ASP has historically risen to the high 30-cent or low 40-cent per watt range, which may serve as a useful benchmark.