Stock Market Rises and Equity Value Increases... Korea Financial Group Soars 28% in One Month

Stock Market Rally, Strong Q1 Earnings, and Rising Equity Value Expectations... Consecutive Gains Including New 52-Week Highs

[Asia Economy Reporter Song Hwajeong] Korea Financial Group has been on a continuous rise recently due to the bullish stock market and expectations of increased equity value from initial public offerings (IPOs).

As of 9:15 a.m. on the 22nd, Korea Financial Group recorded 110,500 KRW, up 500 KRW (0.45%) from the previous day. The previous day, the stock price reached 114,000 KRW during trading hours, setting a new 52-week high. Korea Financial Group's stock price has risen more than 28% since the beginning of this month. The price, which was in the 85,000 KRW range at the end of last month, has consecutively surpassed the 90,000 KRW and 100,000 KRW marks this month.

This strong performance of Korea Financial Group is interpreted as being due to the recent bullish stock market, strong first-quarter earnings, and expectations of increased equity value.

First, the strong stock market in January this year is expected to lead to solid first-quarter earnings. According to financial information provider FnGuide, the consensus estimates for Korea Financial Group's first-quarter operating profit and net income attributable to controlling shareholders are 413.6 billion KRW and 344.4 billion KRW, respectively, indicating a turnaround to profitability compared to the same period last year. Jang Hyoseon, a researcher at Samsung Securities, analyzed, "Korea Financial Group's consolidated net profit for the first quarter is expected to be 365.2 billion KRW, exceeding the consensus by 6.1%. This is because brokerage and wealth management (WM) sectors continue to perform well due to increased trading volume and inflow of stock market peripheral funds, while the corporate finance (IB) sector is also growing steadily due to a booming domestic real estate project financing (PF) market for logistics warehouses and data centers, as well as increased funding demand from IPOs and mergers and acquisitions (M&A)."

In particular, benefits from the IPO boom are anticipated. Korea Financial Group, along with its subsidiary Korea Investment Value Asset Management, holds a 31.77% stake in KakaoBank. As the listing of KakaoBank, considered one of this year's major IPOs, becomes more tangible, expectations for an increase in equity value are growing. Additionally, the thriving IPO market is expected to boost the IB division's performance. Seo Youngsoo, a researcher at Kiwoom Securities, stated, "KakaoBank's listing is expected in July, and market expectations for the held shares will continue. Due to the IPO market boom, Korea Financial Group, a traditional leader, is also expected to see steady related income."