[Click eStock] "Samsung Card, Lack of Signals for Asset Quality Improvement... Investment Rating Neutral"

On the 9th, Korea Investment & Securities maintained a neutral investment opinion on Samsung Card, stating that "the lack of clear signs of improvement in asset soundness indicators acts as a discount factor for the stock price."

On the same day, researchers Baek Doosan and Hong Hyeran from Korea Investment & Securities said, "Samsung Card's net profit for the first quarter of this year is expected to be 162.4 billion KRW, exceeding market expectations by 14%, but reflecting the sluggish growth rate of personal credit sales usage amount, we have lowered our previous Korea Investment & Securities estimate by 8%," explaining this.

The personal credit sales usage amount in the first quarter is estimated to have increased by 1% compared to the same period last year. Researcher Baek said, "Considering that the overall industry growth rate is around 7%, this is a low figure," and added, "This appears to be the result of a continued trend of efficiency-focused internal management, leading to sustained reductions in marketing expenses and interest-free installment plans."

The quarterly delinquency rate is estimated to have risen by 29 basis points (1bp = 0.01 percentage points) to 3.10% compared to the same period last year. However, excluding the effect of allowance reversals, it is estimated to have slightly improved compared to the ordinary delinquency rate of the previous quarter. Researcher Baek said, "Overall, the continuation of a tight risk management stance is positive," but added, "However, since the card loan balance at the end of February increased by 5% compared to the end of last year, additional monitoring is necessary."

He said, "The total borrowing rate is estimated to have maintained the previous quarter's level at 2.84%. The recent strength in asset-backed securities and the rise in borrowing costs are expected to be somewhat more gradual than initially feared, which is positive," and added, "Considering efforts to improve profitability through efficiency-focused internal management and the slowdown in the rise of delinquency rates due to continued strengthening of risk management, a smooth landing of the stock price is expected."