[Asia Economy Reporter Song Hwajeong] Mirae Asset Daewoo posted strong earnings in the second quarter of this year, breaking its post-merger quarterly record once again following the first quarter. With operating profit exceeding 520 billion KRW in the first half alone, attention is focused on whether it will achieve an annual operating profit of '1 trillion KRW' this year.
Mirae Asset Daewoo announced on the 6th that it recorded consolidated operating profit of 387.1 billion KRW, pre-tax net income of 415.3 billion KRW, and net income of 304.1 billion KRW in the second quarter. These figures represent increases of 179.2%, 175.7%, and 184.0%, respectively, compared to the previous quarter. Consolidated controlling shareholder equity stood at 9.53 trillion KRW. On a cumulative basis for the first half, operating profit was 525.8 billion KRW, pre-tax net income was 565.9 billion KRW, and net income was 411.2 billion KRW, marking increases of 30.2%, 9.4%, and 6.1%, respectively, compared to the same period last year. If this trend continues into the second half, it could be the first domestic securities firm to surpass 1 trillion KRW in both operating profit and pre-tax net income.
This record-breaking quarterly performance was driven by a significant increase in domestic stock trading volume, expanded commission income from overseas assets, performance from operating profit (including proprietary investment (PI)) in domestic and foreign bonds, stocks, and over-the-counter derivatives, as well as solid growth of overseas subsidiaries.
The revenue composition by business segment was operating profit 48.2%, brokerage commission 28.6%, corporate finance commission 10.6%, financial product sales commission 7.0%, and interest income 5.7%. A Mirae Asset Daewoo official explained, "Despite changes in the economic environment, we demonstrated earnings stability through a balanced business structure in the first quarter, and this quarter confirmed high earnings expansion potential."
Looking at net operating income by segment, brokerage commission income was 189.9 billion KRW, up 32.5% from the previous quarter. Commission income from overseas stocks, including foreign securities, increased by 18.3% to 36.3 billion KRW. Domestic commission income also rose 36.4% to 153.6 billion KRW.
The balance of overseas stocks continues to grow steadily. This quarter, it increased by 3.1 trillion KRW to 11.4 trillion KRW. Mirae Asset Daewoo expects that as the proportion of overseas commission income expands, it will establish itself as a new revenue source in the brokerage segment.
Total customer assets, including entrusted assets of 132.4 trillion KRW, reached 259.6 trillion KRW, an increase of 33.5 trillion KRW compared to the previous quarter. High Net Worth (HNW) customers with assets over 100 million KRW increased by 18.2% to approximately 189,000.
Operating profit from investments was 319.8 billion KRW, a 479.2% increase from the previous quarter. The official stated, "With the normalization of global stock markets, major indices rose, credit spreads narrowed, and our proactive measures contributed positively across domestic and foreign bond management, derivatives, and PI operations, enabling us to achieve record-high operating profit from investments."
Corporate finance (IB) commission income was 70.1 billion KRW, down 10.4% from the previous quarter. The official added, "Disposal and valuation gains of IB division assets included in operating profit increased significantly, so overall IB-related operating profit is estimated to have increased compared to the previous quarter."
Pre-tax net income of overseas subsidiaries reached 58.8 billion KRW this quarter, up 33.0% from the previous quarter, setting a new quarterly record. On a half-year basis, pre-tax net income was 103 billion KRW, marking the first time in the financial investment industry to exceed 100 billion KRW in half-year earnings. Overseas subsidiaries, which have succeeded in localization across brokerage, wealth management (WM), and IB through region-specific strategies, are expected to account for a larger share of the company's future earnings based on stable growth.
Future earnings are also expected to be positive. Meritz Securities raised its earnings per share and return on equity (ROE) forecasts for Mirae Asset Daewoo this year by 30.7% and 1.3 percentage points, respectively. The target stock price was also raised by 13.4% to 9,300 KRW. Kim Go-eun, a researcher at Meritz Securities, said, "Mirae Asset Daewoo has a unique competitive edge in the overseas brokerage segment, and with the recovery of domestic and international stock markets and falling interest rates, operating profit has improved, leading us to raise our forecasts for this year. The limited exposure to problematic private equity funds is also evaluated positively."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
