Mirae Asset Securities Records Highest Ever Operating Profit in Q1 This Year

[Asia Economy Reporter Song Hwajeong] Mirae Asset Daewoo recorded its highest-ever operating profit in the first quarter of this year.

Mirae Asset Securities announced on the 6th that it posted a consolidated operating profit of 419.1 billion KRW, a pre-tax net profit of 399.5 billion KRW, and a controlling shareholder net profit of 291.2 billion KRW for the first quarter. These figures represent increases of 41%, 49.1%, and 57.4% respectively compared to the previous quarter.

Mirae Asset Securities cited excellent overseas subsidiary performance, record-breaking brokerage commission revenue, and a recovery in corporate finance division results as the factors behind achieving the highest-ever operating profit.

It was explained that due to a one-time non-operating expense of 56.6 billion KRW related to the company name change, the pre-tax net profit and net profit for the period were lower compared to operating profit.

Since the COVID-19 outbreak last year, steady inflows of individual investor funds into the stock market continued into the first quarter of this year, renewing the record for brokerage commission revenue set in the third quarter of last year. The pre-tax net profit of overseas subsidiaries, which achieved excellent results last year, was 69.2 billion KRW, a 157.2% increase compared to the previous quarter.

The corporate finance (IB) division also achieved solid earnings of 97.1 billion KRW by steadily generating profits despite the prolonged non-face-to-face (untact) operations due to COVID-19, expanding mandates in the equity capital market (ECM), and successfully closing numerous high-quality domestic deals.

On a consolidated basis, controlling shareholder equity increased by approximately 356 billion KRW to 9.62 trillion KRW compared to the previous quarter. Accordingly, book value per share (BPS) and earnings per share (EPS) rose by 1,252 KRW and 350 KRW respectively to 15,153 KRW and 1,583 KRW. Return on equity (ROE) also improved by 3.39 percentage points from the previous quarter to 12.33%.

Breaking down revenue by business segment, operating profit including proprietary investment (PI) accounted for 36.2%, brokerage commission 33.8%, interest income 10.6%, corporate finance fees 10.2%, and financial product sales commissions 9.2%.

The overseas stock balance continued its upward trend, increasing by 2.3 trillion KRW this quarter to 18.6 trillion KRW. The current overseas stock balance has already surpassed 20 trillion KRW, firmly establishing overseas brokerage commissions as a new source of operating revenue.

Mirae Asset Securities’ total customer assets reached 362 trillion KRW, including entrusted assets of 221 trillion KRW, an increase of 25.9 trillion KRW from the previous quarter. The number of high net worth (HNW) customers with assets over 100 million KRW rose by 11.5% quarter-on-quarter to approximately 281,000.

Corporate finance fee income increased by 41.5% quarter-on-quarter to 77.1 billion KRW. Debt guarantee fees rose 78.0%, underwriting fees and project financing (PF) & advisory fees increased by 54.3% and 9.3% respectively compared to the previous quarter. Corporate loan income, another corporate finance revenue source, also grew 17.6% quarter-on-quarter to 20 billion KRW. By successfully closing numerous high-quality domestic and international deals, the entire IB division achieved solid earnings of 97.1 billion KRW. Major corporate finance and investment deals in the first quarter of 2021 included SK Shipping acquisition financing, Daelim Gasan-dong data center development project, SK Bioscience, NBT, iQuest, NSYS, and NeoImmunTech initial public offerings (IPOs).

Operating profit was 273.9 billion KRW. Despite unfavorable operating conditions due to interest rate fluctuations during the first quarter, proactive risk management and income from distributions and dividends on investment assets contributed to excellent performance.

To enhance shareholder value, Mirae Asset Securities completed the purchase of 10.5 million treasury shares (approximately 102.5 billion KRW) in the first quarter as a continuation of last year’s treasury stock buyback and cancellation program, and completed the cancellation of 10 million shares. The acquired treasury shares will be actively considered for various uses such as stock cancellation in light of future business conditions.

A Mirae Asset Securities official stated, "Despite the ongoing COVID-19 pandemic and increased volatility in global stock markets, Mirae Asset Securities will do its best to achieve differentiated performance and a stable profit structure. We will also strive to implement a clear shareholder return policy through continuous treasury stock buybacks and cancellations."