[Click eStock] NH "Hyundai Haesang, Undervalued Despite Earnings Peak Concerns"

[Asia Economy Reporter Ji Yeon-jin] NH Investment & Securities stated on the 14th that although there are concerns about Hyundai Marine & Fire Insurance's earnings peak, the stock price is still at an absolutely undervalued level, and with a dividend yield reaching 5.2%, it is positive from an investment perspective.

Hyundai Marine & Fire Insurance recorded a net profit of 125.6 billion KRW in the first quarter of this year, surpassing market expectations. The automobile loss ratio fell by 4.7 percentage points year-on-year to 80.6%, and the expense ratio also dropped by 0.7 percentage points to 19.9%. The investment yield (3.1%) led the profit increase, and the expense ratio was evaluated to be better than expected.

Long-term guaranteed new contracts increased by 4% year-on-year to 35.8 billion KRW, and sales were favorable without new contract expenses (low expense ratio). It is analyzed that Hyundai Marine & Fire Insurance benefited as Samsung and Meritz withdrew from the new contract competition.

Jung Joon-seop, a researcher at NH Investment & Securities, said, "Due to the impact of rising interest rates, the Risk-Based Capital (RBC) ratio recorded 177.6%, down 12.5 percentage points from the previous quarter, so the decline was not large, but the absolute level was not sufficient." However, he added, "It is expected that some defense will be possible through the issuance of subordinated bonds in May (320 billion KRW, RBC ratio +10 percentage points effect)."