[Click eStock] Korea Financial Group, Securities Stocks Gaining Attention Amid High Uncertainty Period

NH Investment & Securities Report

[Asia Economy Reporter Minji Lee] NH Investment & Securities maintained its buy rating and target price of 110,000 KRW for Korea Financial Group on the 6th. This is based on the judgment that achieving an annual net profit of 1 trillion KRW is possible, supported by solid fundamentals despite uncertain conditions.

In the first quarter, the company's consolidated net income attributable to controlling interests is analyzed to decrease by 23.6% compared to the same period last year, reaching 306.8 billion KRW. Even without one-time factors, the core business alone exceeded market expectations.

The securities division earned 155 billion KRW from IB fee income due to strong real estate PF operations, a 9% increase compared to the same period last year. Yoon Yudong, a researcher at NH Investment & Securities, analyzed, “Trading and other divisions managed ELS and bonds better than market concerns, and turned profitable due to the expansion of issued promissory note balances and inflows of dividends and distributions.” Looking at other subsidiaries, asset management (122%), savings banks (171%), and capital (63%) showed significant net income growth compared to the previous quarter through active capital utilization.

The company is expected to record favorable performance in the second quarter as well. It demonstrated excellent risk management capabilities in the first quarter when market uncertainty was at its peak, and its relatively large IB scale and the proportion of net income from IB compared to other companies act as strengths. Researcher Yoon Yudong said, “Concerns about economic slowdown and high interest rates are burdens, but as a major securities firm, the company’s ability to defend its performance will stand out. Since these concerns have already been priced into the stock, considering that interest in dividends will increase in the second half of the year, the current stock price level is not burdensome.”