[Click eStock] "Samsung Securities Expands Shareholder Returns with Stability and High Profitability"

Dividend Yield Expected to Reach 7%
Anticipation Grows for Samsung Group's "Value-Up" Initiative

Samsung Securities is expected to implement a solid shareholder return policy this year based on stability and high profitability. Analysts also suggest that expectations for a group governance restructuring could have a positive impact on the stock price.

On the 17th, LS Securities raised Samsung Securities' target price by 9.4% to 58,000 KRW, citing these factors. The previous trading day's closing price was 48,250 KRW. The investment rating of 'Buy' was also maintained.

Samsung Securities posted a net profit of 147.7 billion KRW in the fourth quarter of last year, turning profitable compared to the same period the previous year. Although it fell short of market consensus, it is evaluated as a successful recovery in profitability. The base effect of a large provision set aside in the same quarter last year disappeared, leading to a rebound in earnings. Commission and interest income remained at the previous quarter's level, and operating profit continued its strong trend.

However, other operating income sharply declined due to a loss of 106.7 billion KRW caused by exchange rate fluctuations. Considering the limited rise in the KRW-USD exchange rate, the possibility of additional related losses is considered low. The annual net profit for last year was 899 billion KRW, an increase of about 64% compared to the previous year. Return on equity also demonstrated high profitability at 12.9%.

Brokerage revenue was maintained at the previous quarter's level despite a decrease in domestic stock market trading volume, thanks to increased overseas stock commission income. Asset management fees decreased by 11.0% compared to the previous quarter due to a reduction in equity-linked securities (ELS) issuance but increased by 20.8% compared to the same period last year. Investment banking (IB) and other fees rose by 31.9% quarter-on-quarter to 82 billion KRW, driven by new high-quality real estate project financing (PF) deals and expansion of acquisition financing.

Although overall profit growth momentum is expected to slow compared to last year, Samsung Securities is forecasted to maintain high earnings stability and profitability based on its strength in serving high-net-worth clients. The expected dividend yield is projected to reach 7%, the highest level in the industry. LS Securities analyst Jeon Bae-seung said, "The dividend payout ratio slightly declined to 34.8% compared to 2022?2023, but the target payout ratio for the next 3?5 years is set at 50%. With ongoing announcements of corporate value enhancement (value-up) from other Samsung financial affiliates, expectations for expanded shareholder returns will continue."