[Click eStock] "Hana Financial Group, Top Pick in Banking Sector... Target Price Up"

Target Price Raised from 77,000 Won to 81,000 Won

Shinhan Investment Corp. on the 4th recommended Hana Financial Group as the top pick in the banking sector and raised the target price from 77,000 KRW to 81,000 KRW. The investment rating was maintained at 'Buy.'

Researcher Eun Kyung-wan of Shinhan Investment Corp. explained, "The target price was raised reflecting changes in earnings estimates and valuation timing," adding, "Amid a general slowdown in stock market momentum and renewed interest in valuation upsides, attention should be paid to Hana Financial Group within the banking sector, which is expected to report strong third-quarter earnings, announce additional share buybacks and cancellations, and disclose plans to enhance corporate value."

Shinhan Investment Corp. forecasts that Hana Financial Group's third-quarter net income attributable to controlling shareholders will reach 1.1 trillion KRW, exceeding the consensus (average securities firm forecast) by 8.8%. Researcher Eun said, "Despite limited asset growth, margin and soundness management will drive strong earnings," and added, "Relatively favorable exchange rate trends also positively impact earnings outlook." Capital ratios are also expected to recover. Eun noted, "As we enter the second half of the year, emphasis is placed on capital ratio management, with the won-denominated loan growth rate below 0.5% in July and August," and said, "Accordingly, the common equity tier 1 ratio in the third quarter is expected to exceed 13.0% again."

Hana Financial Group is scheduled to announce plans to enhance corporate value in the fourth quarter, raising expectations for additional shareholder returns. Researcher Eun stated, "Based on solid earnings strength and improved capital ratios, the company is expected to meet market expectations," adding, "We anticipate diversification in methods such as setting a mid-to-long-term total shareholder return target of around 50%, quarterly equal dividends, and expanding the proportion of share buybacks and cancellations." He further added, "For reference, the total shareholder return ratio for fiscal year 2024 is projected at 37.1%, comprising a dividend payout ratio of 25.5% and 450 billion KRW in share buybacks and cancellations."