[Click eStock] "Kyobo Securities, Stock Revaluation Expected with Earnings Turnaround"

On the 27th, Korea Investment & Securities anticipated a stock price revaluation for Kyobo Securities due to a turnaround in earnings. No investment opinion or target price was provided.

Researcher Hong Ye-ran of Korea Investment & Securities stated, "This year, the return on equity (ROE) is expected to rise by 2.2 percentage points from the previous year to 6.2%," adding, "The ROE increase based on the earnings turnaround will drive re-rating." She continued, "In particular, there is a clear improvement in the asset management division," explaining, "The bond portion within managed assets amounts to 7 trillion KRW, and an expansion of flexible operating profit and loss is expected due to the decline in interest rates."

The rebound of underperforming business units is also expected to contribute to earnings improvement. Researcher Hong said, "Brokerage revenue this year is expected to improve by 9% to 139.7 billion KRW, boosted by last year's low base effect. Corporate finance (IB) revenue is also projected to increase by 80% to 73.1 billion KRW," diagnosing, "Additionally, the phase of decline caused by reduced contract for difference (CFD) fees and real estate project financing (PF) provisions is coming to an end."

Furthermore, Researcher Hong noted that investment sentiment is expected to recover, stating, "Considering this year's earnings growth and undervalued stock price, a dividend yield of at least 5% is anticipated, and the diversified business portfolio will shine supported by industry improvement." She added, "Given that the turning point where profit resilience recovery and investment sentiment improvement occur simultaneously has been reached, a revaluation is expected."