[Click eStock] "Mirae Asset Securities Forecasts Q4 Loss Due to Overseas Real Estate Impact"

On the 11th, IBK Investment & Securities maintained its 'Buy' rating and target price of 7,600 KRW for Mirae Asset Securities, forecasting a loss in the fourth quarter of last year due to the impact of impairment losses on overseas real estate.

Woo Do-hyung, a researcher at IBK Investment & Securities, said, "Mirae Asset Securities' net income attributable to controlling shareholders in the fourth quarter is expected to record a loss of 104.1 billion KRW," adding, "This is due to the recognition of impairment losses on overseas real estate amid the ongoing downturn in the overseas real estate market, poor consolidated earnings from the year-end revaluation of non-marketable assets, and provisions related to Taeyoung Construction."

Commission fees from brokerage are expected to decrease by 30.9% compared to the previous quarter as the average daily trading volume in the fourth quarter declined compared to the third quarter. Corporate finance (IB) and other income are expected to increase by 32.5% quarter-on-quarter due to the base effect from the third quarter's poor performance. Researcher Woo explained, "Trading and other income are expected to show favorable bond valuation gains as interest rates fall, but the increase will not be significant due to provisions related to Taeyoung Construction," adding, "Mirae Asset Securities' exposure to Taeyoung Construction is 170 billion KRW, with an equal split between direct and indirect loans, and provisions of about 50 billion KRW are expected in the fourth quarter."

While the large overseas alternative investment exposure compared to peers is a burden, business diversification such as the acquisition of an Indian securities firm is seen as a differentiating factor. Woo said, "There is pressure on valuation increases due to the large overseas alternative investment exposure compared to peers," but added, "However, the active pursuit of business diversification despite the sluggish business environment, such as the recent acquisition of Indian securities firm Sharekhan, is a point of differentiation from other companies."

Improved shareholder return policies are also positive. Woo forecasted, "An improved shareholder return policy compared to the existing 30% payout ratio is expected to be presented in the first half of this year, which will act as a positive factor for the recovery of the currently weak stock price."