[Click e-Stock] "NH Investment & Securities: Solid Earnings and Dividend Expectations... Target Price Up"

Target Price Raised from 25,000 Won to 30,000 Won

On January 20, DB Securities announced that it expects NH Investment & Securities to continue delivering solid results and raised its target price from 25,000 won to 30,000 won. The investment opinion remains 'Buy'.

Nam Inwook, an analyst at DB Securities, explained, "The reason for raising the target price is the upward revision of earnings estimates due to the recent strong stock market performance."

NH Investment & Securities' fourth-quarter results last year are expected to exceed market forecasts. Analyst Nam stated, "Controlling net profit for the fourth quarter is projected to reach 214.1 billion won, up 94.6% from the same period last year and 6.8% above expectations. Brokerage commissions are expected to increase by 18.6% quarter-on-quarter due to a rise in average daily trading volume driven by the bullish stock market. Investment banking (IB) commissions are expected to decrease by 9.5% due to seasonal off-peak factors, while trading and other income are estimated to have fallen by 64.9% because of weak bond trading valuation gains amid rising market interest rates in November." Interest income is expected to have increased by 9.7%, with balanced growth in margin lending and stock-collateralized loans.

NH Investment & Securities is expected to meet the requirements for separate taxation. Analyst Nam commented, "With a dividend payout ratio of 46.2% (DPS 1,250 won) in 2025, the company is likely to easily meet the criteria for separate taxation as a high-dividend stock. The expected dividend yield is projected to be 5.9% in 2025 and 6.0% in 2026, which would be among the highest in the sector."

There is also valid anticipation regarding the potential acquisition of a comprehensive investment account (IMA) license in the future. NH Investment & Securities applied for the IMA license in September last year, and the review is still ongoing. Analyst Nam stated, "If NH Investment & Securities obtains the IMA license, expectations for improved performance in trading and IB segments will remain valid. The company's utilization rate of its issuance note limit stands at 56%, which is relatively low compared to competitors, but since issuance notes have been primarily used as a funding tool, the demand for issuance is expected to increase once the IMA license is secured."