[Click eStock] "Samsung Securities, Highest Expected Dividend Yield... Target Price 63,000 Won"

Coverage Initiated with Investment Opinion 'Buy' and Target Price of 63,000 Won

Yuanta Securities on the 28th initiated coverage on Samsung Securities, forecasting the highest dividend yield among major securities firms, with a 'Buy' investment rating and a target price of 63,000 KRW. It was also presented as the top preferred stock in the sector.

Researcher Do-Hyung Woo of Yuanta Securities explained, "The reason for the 'Buy' rating is the momentum for stock price increase due to expectations of improved shareholder return policies," adding, "There is also an expectation of earnings improvement from increased overseas stock trading volume based on a relatively high market share in overseas stocks. Additionally, the corporate finance (IB) division is growing steadily, which we believe gives Samsung Securities an advantage over other companies in terms of earnings stability and shareholder returns."

Yuanta Securities projected Samsung Securities' controlling shareholder net profit for next year to increase by 4.3% year-on-year to 947.8 billion KRW. Researcher Woo stated, "Commission income is expected to grow by 3.0% due to balanced growth in brokerage, wealth management (WM), and IB. However, interest income related to brokerage is forecasted to decrease by 1.9% due to margin reduction from interest rate cuts. Trading and product income will increase by 3.3% thanks to stable growth in dividends and distributions, as well as improved disposal valuation gains from interest rate cuts."

The highest dividend yield is expected among major securities firms. Researcher Woo said, "Samsung Securities is expected to announce a corporate value enhancement plan next year. Samsung Life Insurance and Samsung Fire & Marine Insurance, part of the same group, have mentioned plans to raise the total shareholder return ratio to 50% in the mid-to-long term, and we believe expectations for an increase in Samsung Securities' total shareholder return ratio are already reflected in the stock price." He added, "However, due to group shareholding issues, the focus is expected to be on increasing cash dividends rather than share buybacks. The expected dividend yield for 2024 is around 8%, the highest among the securities firms analyzed." The 2024 expected dividend per share (DPS) is 3,700 KRW.