[Click eStock] "DB Insurance, Clear Upward Trend in Performance... Dividend Appeal as a Bonus"

[Asia Economy Reporter Park Jihwan] Hyundai Motor Securities evaluated DB Insurance on the 25th, stating that the mid- to long-term earnings growth trend remains valid, and dividend attractiveness is increasing. They maintained a 'Buy' investment rating and a target price of 75,000 KRW.

Kim Jinsang, a researcher at Hyundai Motor Securities, said, "The net profit for Q4 this year is estimated at 126.2 billion KRW, exceeding the consensus of 102.2 billion KRW," adding, "Annual earnings are expected to reach 771.7 billion KRW, a 53.7% increase compared to the previous year, supported by a decline in automobile insurance loss ratio and steady investment returns." According to the dividend policy of gradually increasing the payout ratio, the dividend yield for this year is estimated at 6.1%.

Next year, it is analyzed that earnings growth compared to the previous year will be possible due to a slight improvement in the combined ratio and the effect of increased investment assets. From 2023 onwards, the earnings cycle is expected to continue positively due to accounting system changes following the adoption of IFRS, indicating favorable mid- to long-term earnings momentum.

Researcher Kim Jinsang stated, "Cumulative guaranteed new contracts for Q3 increased by 11% compared to the same period last year, showing relatively steady external growth," and added, "the retention rates at the 13th and 25th months continue to rise, which is advantageous with the introduction of IFRS17."

Furthermore, due to excellent combined ratio management, insurance profits remain steady, and investment returns rank among the top in the industry, demonstrating a balanced profit structure. Researcher Kim emphasized, "With high mid- to long-term earnings visibility and a steadily increasing payout ratio, the position as a dividend stock is being strengthened," and added, "Recent price adjustments have also increased short-term investment attractiveness."