[Click eStock] "Samsung Securities Expected to Expand Deposit Base in Second Half... Target Price Raised"

Target Price Raised by 6.3% Compared to Previous Estimate

On May 15, KB Securities raised its target price for Samsung Securities from 64,000 won to 68,000 won, citing expectations for an expansion of deposit-based funding in the second half of the year. The investment opinion was maintained at 'Buy.'

Kang Seunggeon, a researcher at KB Securities, stated, "The reason for maintaining the investment opinion is that the return on equity (ROE) for the first quarter of this year was 13.6%, which met expectations. If approval is granted for the issuance of promissory notes business in 2025, Samsung Securities will be able to secure additional growth momentum in the corporate finance (IB) and trading divisions from 2026 onward. The consolidated net profit attributable to controlling shareholders for 2025 is now projected at 929.4 billion won, which is a 3.0% upward revision from the previous estimate. This reflects expectations for improved trading profit due to a recovery in the stock market and falling interest rates in the second quarter. We maintain Samsung Securities as our top pick in the securities sector and raise the target price by 6.3% compared to the previous target," he explained.

In the first quarter, Samsung Securities reported consolidated net profit attributable to controlling shareholders of 248.4 billion won, down 1.9% from the same period last year. Kang noted, "This figure is 4.7% higher than the consensus (average forecast by securities firms). Although profit declined due to lower IB and brokerage fees, the performance is still considered solid."

Brokerage-related profit decreased by 2.9%. Kang analyzed, "While overseas stock trading volume increased by 97.9%, brokerage fee profit declined by 4.4% due to a decrease in domestic trading volume, and net interest income related to brokerage fell by 1.2%."

IB and other commission income also fell by 10.2%, mainly due to a 16.0% drop in structured finance commission income. Trading and product profit increased by 3.7%. Kang commented, "This is due to increased bond valuation gains resulting from falling interest rates. Although the sensitivity of trading profit to interest rate fluctuations is relatively low because of a conservative trading policy, we view the continued profit growth through an increase in the trading book positively."