[Click eStock] "S1, Dividend Increase Positive... Target Price Up"

DPS, 2,500 won → 2,700 won... Increase After 6 Years
Dividend Increase Removes Stock Discount Factor
Strong Q4 2023 Performance Expected

Ebest Investment & Securities analyzed on the 29th that S1 is at a point where it should eliminate the stock price discount factor through an active shareholder return policy. The investment rating was changed from 'Neutral' to 'Buy.' The target price was also raised from the previous 58,000 KRW to 70,000 KRW. S1's closing price on the 26th was 54,400 KRW.

Researcher Kim Seryeon of Ebest Investment & Securities stated, "S1 has never experienced a decline in annual sales historically and has consistently maintained cash assets. However, the reason for maintaining a neutral investment rating was the lack of global investment trends and shareholder value enhancement such as increased dividends or share buybacks." He added, "However, through the recent disclosure, S1 confirmed a more active shareholder return policy by raising the dividend per share (DPS) from 2,500 KRW to 2,700 KRW for the first time in six years."

He said, "Although the pace may be slow, diversification through investment is expected, and it is time to eliminate the stock price discount factor," adding, "I look forward to the company's DNA changing, albeit slowly." S1 announced on the 26th that it decided on a cash dividend of 2,700 KRW per common share (final dividend). The total dividend amount is 91.287 billion KRW, and the dividend record date is December 31, 2023.

S1's Q4 2023 performance is expected to show sales of 694.1 billion KRW and operating profit of 42 billion KRW. These are forecasted to increase by 10.1% and 11.7%, respectively, compared to 2022. Researcher Kim said, "The steady growth across all business sectors is positive, and especially in this Q4, the growth in the infrastructure service sector, led by the security SI sector, appears to have driven overall sales growth." He added, "In the security SI sector, growth was notable due to the expansion of overseas sites such as Samsung Electronics' Taylor Foundry plant and Samsung SDI's battery plant in Hungary."

Additionally, in the real estate service sector, strong performance continued due to the inclusion of new business sites such as Yeoksam Arc Place, in addition to existing customer retention. In the security service sector, the implementation of the Serious Accident Punishment Act and the legislative impact on security in various fields have expanded the market, which is viewed positively. Researcher Kim noted, "Depending on order performance, the upside for the current growth rate forecast of 5% for the relevant business division is somewhat open."