[Click e-Stock] "Samsung Life Insurance Expected to Recover Stock Price Once Dividend Policy Is Established"

On May 19, Daishin Securities stated that the recent decline in Samsung Life Insurance's stock price was due to the earnings shock in the fourth quarter of last year and the absence of a dividend policy. The firm predicted that the stock price would recover once a dividend policy is established. The investment opinion remains 'Buy', and the target price is maintained at 1,250,000 KRW.

Samsung Life Insurance's consolidated net profit for the first quarter was 635.3 billion KRW, up 2.1% year-on-year, exceeding market expectations. Park Hyejin, a researcher at Daishin Securities, explained, "The burden of loss contract costs for participating annuity insurance has eased, improving insurance profit and loss, and investment profit also increased due to higher dividend income from subsidiaries," outlining the background for the strong performance.

However, the new contract service margin (CSM) was 658 billion KRW, down 23.3% year-on-year, showing some weakness. Park analyzed, "Although the proportion of new health insurance contracts, which the company emphasizes, reached a record high, the death benefit coverage was significantly reduced." The new contract CSM for health protection products was 488 billion KRW, up 6.3% year-on-year, and the multiplier remained at 16.3 times, continuing a solid trend.

Park stated, "Because the capital policy has not been finalized, the stock price has continued to decline since the fourth quarter earnings announcement last year." She added, "If there is no sudden profit decline due to abrupt CSM adjustments like in 2024, this year's annual profit is expected to reach 2.44 trillion KRW, up 15.9% from the previous year." She also predicted that if a value-up disclosure, including the capital policy of Samsung Electronics?which contributes the most to dividend income?is made, and Samsung Life Insurance's capital policy is subsequently announced, the stock price could rise again.