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Key catalysts are still ahead

Lower TP to W320,000 but retain as our top pick in the sector

We lower our target price for OCI Holdings to W320,000 (from W400,000), reflecting more conservative assumptions for 2026 polysilicon ASP and sales volume following the delay in the announcement of Section 232 measures. That said, despite the recent share price correction, we believe the firm’s fundamentals and competitive positioning remain intact. We continue to view both the anticipated Section 232 announcement and the expected announcement of the firm’s polysilicon expansion plan as key catalysts for a share price recovery. We maintain OCI Holdings as our top pick in the sector for 2H26.

2Q26 preview: In-line results likely

For 2Q26, we now estimate operating profit at W127.6bn (vs. previous forecast of W167bn), in line with the consensus of W125.7bn. The delay in the Section 232 announcement appears to have pushed back the timing of polysilicon price increases. Customers also appear to have deferred purchases pending greater clarity on the policy outcome, weighing on sales volume. That said, gains from power generation asset sales and a stronger contribution from OCI likely helped offset weakness at OCI TerraSus (OCI TRS; polysilicon), cushioning the impact on overall earnings.

Investment points: Section 232 measures and polysilicon capacity expansion

While the announcement of Section 232 measures has been delayed relative to our initial expectation, the underlying policy direction remains unchanged. As the investigation is aimed at reducing US dependence on Chinese polysilicon and derivative products, the relative price competitiveness of non-Chinese polysilicon should improve, creating room for OCI Holdings to raise ASPs. The US Department of Commerce is believed to have submitted its investigation results to the White House in early to mid-May. Given the 90-day presidential review period, early August appears to be the most likely timing for the announcement.

We also expect the firm to announce its polysilicon capacity expansion plans in the near term. Amid large-scale solar capacity ramp-up plans in the US, rising power demand from AI/data centers, and the implementation of prohibited foreign entity (PFE)/foreign entity of concern (FEOC) rules and Section 232 measures, the shortage of non-Chinese polysilicon is likely to become increasingly pronounced. As customers increasingly seek to secure access to non-China polysilicon supply, the likelihood of long-term supply agreements with OCI Holdings should increase. We therefore expect the company’s capacity expansion plans to take shape quickly as it moves to meet surging demand.