[Click eStock] "Mirae Asset Securities, Shareholder Return Policy Highlighted as a Differentiator"

Korea Investment & Securities Report

[Asia Economy Reporter Minji Lee] Korea Investment & Securities maintained its buy rating and target price of 13,400 KRW for Mirae Asset Securities on the 14th. This is based on the judgment that the shareholder return policy will have a positive effect on the stock price despite the sluggish business conditions.

The company's controlling net profit for the first quarter is expected to fall 12% short of market expectations at 203.8 billion KRW. This is due to poor brokerage and asset management performance, with brokerage commissions estimated to have decreased by 22% from the previous quarter to 134.3 billion KRW. The average daily trading volume in the market is expected to have decreased by 13%, and overseas stock contracts are also believed to have declined by 15%. On the other hand, corporate finance fees are expected to improve by 47% from the previous quarter to 81.1 billion KRW. Major deals in the first quarter include acquisition financing for Daewoo Construction, IPOs of Auto& and Narae Nanotech, Gonggu Woman, and rights offerings of Daehan Electric Wire and Doosan Heavy Industries.

Asset management profits are predicted to decrease by 25% from the previous quarter to 227.7 billion KRW, reflecting poor bond and derivatives management performance. It is positive that some trading valuation gains may improve due to fair value evaluation issues related to Naver Financial and others. As of the fourth quarter of last year, the equity value of Naver Financial was 820.5 billion KRW, with cumulative valuation gains of 141.2 billion KRW since the first quarter of 2020. Financial product sales commissions are estimated to have decreased by only 2% from the previous quarter, and interest income and expenses by 3%, showing resilience.

Baek Doosan, a researcher at Korea Investment & Securities, analyzed, “Mirae Asset Securities benefits from differentiated management capabilities and the fact that some of the 8.2 trillion KRW investment assets have entered the recovery phase,” adding, “The shareholder return policy will positively affect the stock price in a difficult business environment.” The company announced at the beginning of the year the cancellation of 174 billion KRW worth of treasury shares purchased during 2020-2021 and the repurchase of 9.4 million shares. Researcher Baek said, “Since 94% of the repurchase has been completed, additional repurchases are expected within the year after the repurchase ends,” and maintained it as the top pick in the securities sector.