'Mirae Asset Securities' Stock Buyback Effect Hits 8,000 Won After 19 Months'

Stock Price Rises on Confidence in Shareholder Return Policy
Expectations for New Policy Announcement This Year Also Boost Sentiment

Mirae Asset Securities' stock price has been rising continuously due to the effect of its share repurchase. High confidence in the shareholder return policy is being credited for the strong stock performance.

According to the Korea Exchange on the 31st, Mirae Asset Securities reached an intraday high of 8,140 KRW, marking a 52-week record high. It is the first time in 19 months since early June 2022 that Mirae Asset Securities' stock price exceeded 8,000 KRW during trading hours. The stock closed at 7,890 KRW, up 2.47% from the previous day, continuing its upward trend for six consecutive days.

The news of additional share repurchases is interpreted as the cause of the stock price rally. On the 25th, Mirae Asset Securities announced it would repurchase shares to enhance shareholder value. The planned acquisition includes 10 million common shares and 500,000 Class 2 preferred shares, representing approximately 2.2% and 0.4% of the outstanding shares, respectively. Mirae Asset Securities plans to complete the purchases on the market within three months from March 26 to April 25. This follows the purchase of 10 million common shares over three months starting in October last year. Additionally, the company plans to resolve a proposal for treasury stock cancellation and dividends at the board meeting on the 22nd of next month, continuing its shareholder return policy.

It is analyzed that consistent share repurchases have secured high market confidence in the shareholder return policy. Kim Jae-cheol, a researcher at Kiwoom Securities, said, "Mirae Asset Securities announced a three-year shareholder return policy in 2021 aiming for an annual shareholder return rate (cash dividend payout ratio plus profit cancellation) of over 30%, and recorded an average shareholder return rate of 32.8% from 2020 to 2022." He added, "Considering that all shares repurchased since 2018 were acquired directly, that the ratio of shares canceled after acquisition exceeds about 70%, and that the planned shareholder return rate of over 30% has been achieved, the confidence in Mirae Asset Securities' shareholder return policy is at a high level." It is expected that the cancellation and dividend resolution for shares acquired by the end of last year will also allow the shareholder return rate to exceed 30% smoothly for last year.

This high confidence appears to have led to the stock price increase. Researcher Kim said, "After past share repurchase announcements, Mirae Asset Securities' stock price mostly showed a rebound." He added, "From 2020 to 2023, there were eight share repurchase announcements, and the average return from the announcement date to the completion date of acquisition was 16.5%. At the end of last year, the stock price was driven by a 19.6% return from the announcement on October 18 to the completion of acquisition on December 26."

Although weak performance is expected in the fourth quarter of last year, the stock price trend is forecast to remain positive for the time being due to the company's active shareholder return commitment. According to financial information provider FnGuide, the consensus for Mirae Asset Securities' Q4 earnings (average of securities firms' forecasts) expects operating profit to decrease by 8.89% year-on-year to 72.8 billion KRW, and a net loss attributable to controlling shareholders of 27.5 billion KRW, turning to a deficit. Ahn Young-jun, a researcher at Hana Securities, said, "It is unfortunate that the annual net profit declined due to the downward revision of Q4 earnings estimates, lowering the lower bound of shareholder return scale, but the continuous demonstration of active shareholder return commitment is expected to have a positive impact on the stock price trend for the time being."

New shareholder return policies to be announced this year are also anticipated. Researcher Kim said, "Just as the three-year shareholder return policy was announced in 2021, it is expected that a three-year shareholder return policy will be announced again this year, making it a year to look forward to renewed shareholder return momentum."