[Click eStock] "Meritz Securities Q2 Earnings Exceed Market Expectations...Target Price Up"

[Asia Economy Reporter Jihwan Park] Samsung Securities announced on the 30th that Meritz Securities posted a consolidated net profit of 190.3 billion KRW in the second quarter, exceeding market expectations, driven by strong corporate finance and trading income. The investment rating 'Buy' was maintained, and the target price was raised by 9.09% from 5,500 KRW to 6,000 KRW.

Jang Hyoseon, a researcher at Samsung Securities, analyzed, "The consolidated net profit for the second quarter recorded 190.3 billion KRW, surpassing market expectations by 18.2%, due to strong corporate finance and trading income." The strong performance was attributed to robust operations, including approximately 25 billion KRW in fees recognized from arranging the Magok MICE development real estate project financing (PF). Corporate finance fee income increased by 72.3% year-on-year to 158 billion KRW. Trading income also showed solid results in both stocks and bonds, rising 24.3% over the year to 187.9 billion KRW. Brokerage commission income decreased by 29.7% to 13.5 billion KRW due to a decline in market trading volume.

A notable point highlighted was that corporate finance income exceeded 100 billion KRW, demonstrating excellent operational capability. Other income from trading and other segments also maintained a steady level, showing signs of revenue diversification.

However, uncertainty regarding shareholder return policies was pointed out as a concern. An additional 100 billion KRW worth of share repurchases and cancellations were announced in June. The expected total shareholder return ratio for this year (cash dividends + share repurchases) is 38%, which is considered to have partially alleviated the uncertainty around shareholder return policies.

Researcher Jang Hyoseon stated, "Due to the nature of the business requiring continuous capital and the lack of clear standards for share repurchases, concerns about the sustainability of capital policies remain."