[Click e-Stock] "Woori Financial Group Expected to See High Growth in Earnings and Shareholder Returns... Target Price Raised"

On December 16, Daishin Securities analyzed Woori Financial Group, stating, "From next year, the company is expected to post a higher earnings growth rate than its competitors, driven by the inclusion of insurance and securities results. The increase in total shareholder return is also projected to be the highest among our coverage universe due to the upward adjustment in the total payout ratio."

Hyejin Park, a researcher at Daishin Securities, maintained Woori Financial Group as her top pick in the sector in a report released on this day, raising the target price by 23.3% from 30,000 won to 37,000 won. Park noted that Woori Financial Group was the only one among the four major financial holding companies to be excluded from the Hong Kong ELS penalty, and highlighted the tax-free dividends, which will begin with the fourth-quarter dividend this year, as a key investment point.

In particular, Woori Financial Group is expected to show the highest growth rate in terms of total shareholder return. Park explained, "While more competitors are expected to reach a 50% total payout ratio earlier than initially planned, it will be difficult for them to maintain such aggressive policies going forward." In contrast, Woori Financial Group still has significant room to increase its payout ratio from 35% this year to 50%, and with additional profit growth expected from the completion of its non-banking affiliate portfolio, it is projected to deliver the highest growth rate in total shareholder return.

Woori Financial Group's net profit for next year is forecast to reach 3.32 trillion won, up 1.4% from 2025. This is because the results of Tongyang Life Insurance, ABL Life Insurance, and Woori Investment & Securities will be reflected in all four quarters, leading to a higher profit growth rate compared to other financial holding companies. The combined additional profit contribution from Tongyang Life Insurance and ABL Life Insurance is expected to be around 200 billion won, with Tongyang Life Insurance anticipated to make a full-fledged profit contribution starting in 2027. However, in the case of the securities business, due to increased costs such as advertising and promotion expenses following the launch of the integrated securities company this year, performance is expected to be somewhat sluggish, and it is analyzed that it will take time before it makes a substantial profit contribution.

The total payout ratio for next year is projected to rise to 40%. Park stated, "The CET1 ratio at the end of this year is expected to record 12.76%, a slight decrease from the third quarter, but since it remains above 12.5%, the total payout ratio will be raised in line with the value-up policy." This year's total payout amount is expected to be 1.16 trillion won (including 150 billion won for share buybacks and cancellations), while next year's total payout amount is projected to increase by 14.6% to 1.33 trillion won (including 200 billion won for share buybacks and cancellations).

Next year's dividend per share (DPS) is estimated to rise by 11.9% to 1,510 won from 1,350 won this year. Park also predicted, "For individual investors, starting with the fourth-quarter dividend this year, dividends will be tax-exempt, allowing them to enjoy an effective increase in dividends of around 18%."