[Click e-Stock] "Kiwoom Securities Expected to Benefit from Bullish Market... Target Price Raised"

On October 21, Korea Investment & Securities raised its target price for Kiwoom Securities from 2.8 million won to 3.1 million won, citing anticipated benefits from the bullish stock market. The company maintained its "Buy" investment rating.

Baek Doosan, a researcher at Korea Investment & Securities, stated, "With the market rally continuing since September, brokerage performance is expected to expand significantly from the fourth quarter onward," adding, "We expect Kiwoom Securities to benefit from the resumption of U.S. weekly trading starting November 4, as well as from the ongoing domestic stock market boom."

As of October 17, the average daily trading value in the domestic stock market for October stood at 36.6 trillion won, up 42% from 25.8 trillion won in the third quarter. During the same period, the notional value of overseas stock trading reached 49.5 billion dollars, a 52% increase from the previous quarter.

Kiwoom Securities' third-quarter results this year are expected to meet market expectations. Researcher Baek said, "Kiwoom Securities' third-quarter net profit attributable to controlling shareholders is projected to be 280.6 billion won, which is generally in line with the consensus (the average forecast by securities firms). By segment, domestic stock commission income is expected to reach 96.2 billion won, up 6% from the previous quarter. Although the average daily trading value in the domestic stock market grew 9% over the same period to 25.8 trillion won, Kiwoom Securities' market share in notional trading fell by 2.1 percentage points to 18.2%, as trading volume was concentrated in large-cap stocks."

Overseas stock commission income is forecast to increase by 4% to 74.5 billion won, while investment banking (IB) commission income is estimated to decline by 6% to 73.7 billion won due to base effects.

Net interest income is expected to rise by 6% to 186.6 billion won. Baek noted, "Both margin lending and deposit profit are projected to increase by 14% on the back of the bullish stock market," adding, "Sales & Trading (S&T) and proprietary trading income are expected to fall by 34% quarter-on-quarter to 80.8 billion won, but improve by 34% year-on-year. Although bond trading was sluggish compared to the previous quarter, the S&T segment, including ETF liquidity provider transactions, and equity-related investment management are expected to post strong results."