[Click e-Stock] "Kiwoom Securities, Brokerage Revenue Improvement Trend Noted... Target Price Up"

Target Price Raised from 145,000 KRW to 155,000 KRW

On the 5th, Korea Investment & Securities raised the target price for Kiwoom Securities from 145,000 KRW to 155,000 KRW, anticipating a flexible improvement in the brokerage-related business division's earnings. The investment rating was maintained at 'Buy.'

Baek Doosan, a researcher at Korea Investment & Securities, explained, "As a result of increasing the average daily trading volume this year from 19.6 trillion KRW to 22.3 trillion KRW, we have raised the annual net profit forecast by 10%. We focus on the flexible improvement trend in the brokerage-related business division and maintain Kiwoom Securities as the top pick in the securities sector."

Kiwoom Securities' first-quarter performance this year is expected to exceed market expectations. Researcher Baek said, "The first-quarter net profit attributable to controlling interests is revised upward by 33% from the previous estimate to 209 billion KRW, surpassing the consensus (average securities firm forecast) by 17%. This is because the retail division's net revenue is solid due to better-than-expected domestic and overseas stock contracts, and the proprietary investment (PI) division is also expected to perform well."

Operating profit and loss for the first quarter is expected to be 27.5 billion KRW, similar to the previous quarter. Researcher Baek explained, "While dividend income of 17.3 billion KRW from Woori Financial Group is recognized, the domestic stock market has shown favorable conditions since February, and the PI division's earnings in February and March appear strong, leaving room for further improvement in operating profit and loss compared to the previous quarter." Brokerage commissions are estimated at 168.3 billion KRW, a 20% increase from the previous quarter. Earnings seem to have increased significantly mainly from domestic and overseas stocks rather than derivatives. Researcher Baek analyzed, "Kiwoom Securities' stock contract amount (excluding ETFs) in the first quarter was 543 trillion KRW, a 31% increase from the previous quarter, and the total market overseas stock contract amount was 103 trillion KRW, up 48%. The overseas stock contract market share also appears to have improved by about 3 percentage points, and despite the trend of commission rate reductions, related earnings remain solid."