[Click eStock] "Samsung Fire & Marine Insurance Target Price Raised from 316,000 to 377,000 Won"

On the 23rd, NH Investment & Securities raised the target price for Samsung Fire & Marine Insurance, stating that "there was no clear shareholder return policy presented during the conference call," but "given the high investor expectations for surplus capital, there is a possibility of announcing an improved shareholder return policy in the future."

The target price for Samsung Fire & Marine Insurance was raised from the previous 316,000 KRW to 371,000 KRW. The discount rate was reduced from 35% to 20%, reflecting the high likelihood of expanded shareholder returns. The target price was calculated by applying a target PBR (Price-to-Book Ratio) of 0.91 times to the 2024 BPS (Book Value Per Share) of 407,693 KRW.

During the conference call the previous day, Samsung Fire & Marine Insurance did not present management targets for the K-ICS (Korea Insurance Capital Standard) ratio or shareholder return policies. However, they mentioned securing a risk buffer from surplus capital and the need for capital increases in subsidiaries, and stated that a capital management policy would be announced within the first half of the year.

Despite holding the most overwhelming capital ratio among major insurers (K-ICS ratio of 271.9%), the somewhat passive stance is a disappointing factor. However, given the high investor expectations for resolving the high capital ratio and the commitment to announce capital policies later, the expectation that shareholder returns will improve compared to now remains valid.

The forthcoming capital policy is expected to focus more on enhancing ROE (Return on Equity) through investments in subsidiaries and overseas companies rather than on share buybacks and cancellations, as well as on concrete dividend policies (such as upward trends in DPS (Dividends Per Share), setting dividend payout ratio guidelines, and the possibility of interim dividends).

Samsung Fire & Marine Insurance’s Q4 net income attributable to controlling interests was 175.2 billion KRW, falling short of market consensus. Although Q4 results were weak due to losses from bond replacement trading, investment income is expected to improve significantly in 2024.