[Click eStock] "Meritz Securities, Consistent Performance... Dividend Appeal Up"

IBK Investment & Securities Issues 'Buy' Rating and Sets Target Price at 5,000 Won... Closing Price on 26th at 3,815 Won

[Asia Economy Reporter Kum Boryeong] An analysis has emerged that Meritz Securities is consistently delivering solid performance.

According to IBK Investment & Securities on the 27th, Meritz Securities' cumulative consolidated net profit for the third quarter of this year reached 420.6 billion KRW, marking a 56% growth compared to the previous year.

Kim Eungap, a researcher at IBK Investment & Securities, explained, "Since the first quarter of 2018, the company has recorded net profits exceeding 100 billion KRW every quarter," adding, "Due to an increase in stock market trading volume, the net operating income from the brokerage division, which saw significant growth in the second quarter, increased by 28% in the third quarter compared to the previous quarter, achieving the highest quarterly performance."

The number of customer assets and high-net-worth clients is also on the rise. Asset management income showed favorable results in both the second and third quarters. Although loan and debt guarantee balances have steadily decreased, reducing related income, this has been offset by other revenue streams.

Meritz Capital, a 100% subsidiary, has grown to the next level this year. While last year's quarterly net profit was in the mid-20 billion KRW range, it reached 35 billion KRW in the second quarter and 38.9 billion KRW in the third quarter this year. The cumulative net profit for the third quarter this year was 100.9 billion KRW, following 83.4 billion KRW in 2018 and 102.9 billion KRW last year, suggesting the possibility of recording the highest annual net profit.

Asset quality, which began to deteriorate in the third quarter of last year, has not yet shown clear improvement. Researcher Kim stated, "The non-performing loan ratio for the third quarter of this year is 4.3%," and analyzed, "Although the allowance for loan losses is gradually increasing, it is not enough to significantly affect profits and losses and appears to be within a manageable range."

IBK Investment & Securities has given Meritz Securities a 'Buy' investment rating with a target price of 5,000 KRW. The closing price on the 26th was 3,815 KRW. Researcher Kim said, "There were concerns about growth and profitability due to securities companies' real estate project financing (PF) regulations, but based on retail performance, the scale of net profit remains steady," adding, "The dividend attractiveness is high, with a projected dividend yield of 5.3% based on the current stock price."