[Click eStock] "Samsung Life Insurance, Differentiated Shareholder Return Capacity... Target Price Up"

Target Price Raised from 99,000 KRW to 116,000 KRW

On the 13th, NH Investment & Securities raised the target price for Samsung Life Insurance from 99,000 KRW to 116,000 KRW, viewing it as the insurance stock most likely to show visible and proactive shareholder return expansion among major insurers. The investment rating was maintained at 'Buy.'

Jung Joon-seop, a researcher at NH Investment & Securities, explained, "We raised the target price by reducing the discount rate for the financial sector, reflecting the leading potential for shareholder return expansion among insurance stocks."

Samsung Life Insurance is expected to implement a continuous and visible shareholder return expansion policy among major insurers. Researcher Jung said, "While maintaining the previously suggested dividend payout ratio (35-45%, with DPS increasing annually), the possibility of expanding shareholder returns through share buybacks and cancellations is a key differentiator from other insurers."

Regarding the background for expecting more proactive shareholder returns than other insurers, Jung explained, "With an annual insurance contract margin (CSM) growth of around 10%, a high new solvency regime (K-ICKS) ratio, and sufficient distributable profits, the capacity for returns is high. Major shareholders who need to secure inheritance tax resources benefit more as Samsung Life's corporate value increases." He added, "Also, unlike affiliated insurers (Samsung Fire & Marine Insurance), the governance burden related to share cancellations is lower."

However, since the stock price has already risen sharply due to expectations of expanded shareholder returns, short-term stock price volatility is expected to increase. Researcher Jung noted, "Since the January low, Samsung Life's stock price has risen about 60%, showing the highest increase among all insurance stocks recently, reflecting the market's high expectations for shareholder return expansion. However, as the shareholder return policy has not yet been concretized, stock price volatility is expected to increase until the policy confirmation point."