[Click e-Stock] "Kiwoom Securities: Solid Trading Profits and Market Conditions... Target Price Raised"

Target Price Raised by 9% Compared to Previous Estimate

Korea Investment & Securities announced on May 2 that it has raised its target price for Kiwoom Securities from 170,000 won to 185,000 won, citing better-than-expected trading profits and favorable market conditions. The company maintained its 'Buy' investment rating.

Baek Doosan, a researcher at Korea Investment & Securities, stated, "We have raised our 2025 annual net profit estimate by 5% compared to our previous forecast, as trading profits and market conditions have proven to be better than initially feared." He added, "Expectations for new promissory note businesses and capital market revitalization policies are also factors for re-rating."

Kiwoom Securities' first quarter results this year exceeded market expectations. Baek explained, "First quarter controlling net profit was 235.3 billion won, surpassing our estimate by 9% and the consensus (average of securities companies' forecasts) by 8%. Although brokerage commission income was weak compared to estimates, strong trading profits made up for it."

Brokerage commissions were 184.4 billion won, down 2% from the previous quarter. Baek noted, "Domestic stock commission income rose 12% during the same period to 73.7 billion won, thanks to increased market trading volume, but overseas stock commission income fell 15% to 67.4 billion won. Kiwoom Securities' average daily overseas stock transaction volume surged 46% to 1.9 trillion won. However, due to aggressive promotions led by the 'Hero Membership,' the average commission rate for overseas stocks dropped 3.5bp during the same period to 5.8bp (1bp = 0.01 percentage point)."

Investment banking (IB) commissions were 57.0 billion won, up 19% from the previous quarter. Baek explained, "Structured and project financing (PF) commissions increased 29% to 44.0 billion won from the previous quarter," adding, "Despite a challenging environment, PF income led by data centers expanded."

Interest income from credit extensions increased 6% due to a rise in the related quarterly average balance, and trading profits reached 98.0 billion won, up 141% from the previous quarter and 4% from the same period last year. Baek analyzed, "This is the result of better-than-expected bond trading profits," and added, "Meanwhile, the poor performance of the savings bank affiliate continued due to asset quality issues."