[Click eStock] "Capital Ratio Improvement... Hana Financial Group, Target Price Maintained"

NH Investment & Securities maintained a buy rating and a target price of 86,000 KRW for Hana Financial Group on the 2nd, stating that "clear improvements in capital ratios have increased expectations for value-up." The previous trading day's closing price was 58,800 KRW.

On the same day, Junseop Jeong, a researcher at NH Investment & Securities, said, "It is unfortunate that Hana Financial Group was not included in the 'Korea Value-Up Index' (Value-Up Index) constituent stocks, but this could rather become an opportunity for a turnaround."

Hana Financial Group is expected to announce a corporate value enhancement plan (Value-Up) on its earnings announcement day this month. Based on the improved capital ratio, it is anticipated to disclose an active capital policy to be included in the index.

In particular, the capital ratio, which was a weakness compared to competitors, is expected to improve significantly in the third quarter. Researcher Jeong said, "The improvement in the capital ratio is due to minimizing the increase in risk-weighted assets (RWA) linked to real economy in the third quarter through a strategic loan growth strategy and the decline in exchange rates," adding, "Hana Financial Group's common equity tier 1 (CET1) ratio at the end of last month is expected to improve by about 30 basis points (bp = 0.01 percentage points) to 13.1% compared to the previous quarter."

He emphasized, "The improvement in the capital ratio provides ample buffer capital in a situation where capital regulations are expected to be strengthened, such as the introduction of year-end stress buffer capital," and added, "At the same time, it serves as a foundation for continuous expansion of shareholder returns."

The third-quarter net income attributable to controlling interests is expected to record a relatively favorable performance, increasing by 9.2% year-on-year to 1.0453 trillion KRW. Researcher Jeong added, "This year, the price-to-book ratio (PBR) based on book value per share (BPS) is only 0.44 times," and "Compared to competitors exceeding 0.5 times, the valuation (stock price level relative to corporate value) attractiveness is high."