[Click eStock] "Dongyang Life Insurance, Expected Dividend per Share 420 Won... Target Price Maintained"

Q4 Net Profit of 78.3 Billion KRW Exceeds Consensus
Insurance Profit Declines but Investment Profit Turns Positive

Yuanta Securities on the 28th revised the expected dividend per share (DPS) for Dongyang Life Insurance from 440 KRW to 420 KRW. The investment rating 'Buy' and the target price of 6,500 KRW were maintained. Dongyang Life Insurance's closing price on the 27th was 5,300 KRW.

Jeong Tae-jun, a researcher at Yuanta Securities, said, "Dongyang Life Insurance's DPS was 400 KRW, below our estimate of 430 KRW," adding, "The company's expected 2024 new solvency ratio (K-ICS) is revised from 177.2% to 186.8%, and the expected dividend per share is changed from 440 KRW to 420 KRW."

Dongyang Life Insurance's net profit for the fourth quarter was 78.3 billion KRW, exceeding Yuanta Securities' estimate of 34.4 billion KRW and the consensus (market average forecast) of 42.1 billion KRW. Insurance profit decreased by 24.6% compared to the previous quarter, while investment profit turned positive compared to the previous quarter. Researcher Jeong said, "Insurance profit decreased due to an increase in other insurance losses, and investment profit improved due to an increase in fair value through profit or loss (FVPL) gains on financial assets," adding, "K-ICS rose by 9.2 percentage points from the previous quarter due to reductions in insurance risk and operational risk."

Additionally, an actuarial assumption change loss of 17.9 billion KRW occurred due to a reduction in the interest rate on policyholder loans, expanding other insurance losses. Excluding insurance finance profit and loss, investment profit increased by 143% compared to the previous quarter. Researcher Jeong said, "To reduce large fluctuations in FVPL gains, we are continuously reducing FVPL assets," adding, "The quarterly insurance contract margin (CSM) decreased by 1.4% compared to the previous quarter, but due to the impact of actuarial assumption changes, CSM adjustments expanded compared to the previous quarter, resulting in an ending CSM decrease of 1.3% compared to the previous quarter."