On the 30th, Kiwoom Securities downgraded the target price of Industrial Bank of Korea from 20,000 KRW to 19,000 KRW, pointing out that there is no way to strengthen the shareholder return policy. The investment opinion was maintained as 'Buy.'
Kim Eun-gap, a researcher at Kiwoom Securities, stated in the report on the same day, "Considering that there is no appropriate way to strengthen the shareholder return policy until the next dividend settlement," and added, "Given the 2024 return on equity (ROE) forecast of 8.8%, the current price-to-book ratio (PBR) of 0.32 times is low compared to the fundamentals."
Industrial Bank of Korea's consolidated net profit for the first quarter of this year was 784.5 billion KRW, an 8.4% increase compared to the same period last year. This exceeded Kiwoom Securities' forecast by 3.1% and the consensus by 8.6%, achieving the best quarterly performance.
Researcher Kim Eun-gap said, "The additional provision cost of 291.2 billion KRW recognized in the first quarter of 2023 disappeared, resulting in a 47% decrease in provision costs," and added, "Although there is room for provision costs to increase per quarter in the future, it is highly likely to decrease compared to 2023, which is expected to be a major cause of performance improvement."
The dividend per share (DPS) for 2024 is expected to increase by one step to 1,050 KRW. However, the time lag until the next dividend settlement was pointed out as an issue. Researcher Kim Eun-gap said, "In the case of Industrial Bank of Korea, it seems that it will take quite a long time structurally and institutionally for treasury stock repurchase and cancellation to be executed," and added, "The problem is that there is still a lot of time left until the year-end dividend in the fourth quarter, and until then, there is no news of quarterly dividends or treasury stock repurchase and cancellation, so it is likely to receive relatively less attention in the value-up issue."
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