[Click eStock] "Korea Financial Group, Securities Business Expected to Continue Strong Performance... Target Price Up"

Target Price Raised from 98,000 KRW to 113,000 KRW

On the 7th, NH Investment & Securities raised the target price for Korea Financial Group from 98,000 KRW to 113,000 KRW, citing continued strong performance in the securities business. The investment rating was maintained at 'Buy.'

Yoon Yudong, a researcher at NH Investment & Securities, explained, "The target price was raised following an upward revision of earnings estimates," adding, "The rapid structural improvement of the secondary financial sector affiliates is being demonstrated each quarter, and considering the interest rate cut cycle next year, the securities core business is expected to continue showing strong performance."

Korea Financial Group's third-quarter earnings this year exceeded market expectations. Researcher Yoon analyzed, "The consolidated net income for the third quarter increased by 47.4% year-on-year to 312.7 billion KRW, surpassing the consensus (average securities firm forecast)," and noted, "The profit resilience centered on corporate finance (IB) and asset management stands out." The third-quarter fee income in the IB division recorded 92.9 billion KRW, down 12.4% year-on-year. Yoon said, "We arranged numerous real estate project financing (PF) deals in Mapo, Hapjeong, Suwon, and other areas," adding, "The fourth quarter is expected to see strong performance in the traditional IB division due to underwriting for Theborn Korea and Sungwoo IPOs."

The reflection of real estate PF business feasibility evaluations has been completed, and routine levels of provisions are expected going forward. Researcher Yoon explained, "Provisions of 10 billion KRW for securities, 47 billion KRW for savings banks, and 25 billion KRW for capital were recognized; the financial authorities' on-site inspections concluded in the second quarter, and routine levels of provisions are expected to be reflected going forward," adding, "In the fourth quarter, some loss recognition is anticipated for overseas exposure amounting to 500 billion KRW."