[Click eStock] "Samsung Life Insurance, Expected Solid Performance This Year"

DB Financial Investment

[Asia Economy Reporter Song Hwajeong] DB Financial Investment raised the target price for Samsung Life Insurance from 85,000 KRW to 106,000 KRW on the 24th, expecting strong performance this year. The investment rating was maintained at 'Buy.'

Net profit for the first quarter of this year is projected to reach 1 trillion KRW. Lee Byung-geon, a researcher at DB Financial Investment, stated, "The biggest variable in Samsung Life Insurance's performance this year is the special dividend from Samsung Electronics, which will bring in an amount exceeding 800 billion KRW. Since the loss ratio trend in January and February is better than the management plan, even if there is some burden in the second half, the first quarter net profit will be very strong."

Although the dividend payout ratio slightly decreased last year, the dividend per share (DPS) is expected to increase significantly this year. The researcher said, "Due to the base effect of Samsung Electronics' special dividend and worsening negative margins, a decline in performance is expected in 2022, but considering the plan to gradually increase the dividend payout ratio, it does not seem likely that the payout ratio will decrease again. Even assuming a slightly increased payout ratio of 36%, the DPS is expected to rise to 3,200 KRW."

The researcher explained, "Considering the rise in Samsung Electronics' stock value, the increase in dividend inflows, and the rising interest rate environment, investment in Samsung Life Insurance appears attractive. Although the profit and loss effects of rising interest rates will not appear immediately within 1 to 2 years, it is clear that it will affect the increase in Samsung Life Insurance's intrinsic value."