[Click eStock] "Korean Reaffirms Commitment to Boost Stock Price... Third Share Buyback This Year"

Cape Investment & Securities, Investment Opinion 'Buy', Target Price Set at 10,000 KRW... Closing Price on 17th 7,960 KRW

[Asia Economy Reporter Geum Bo-ryeong] An analysis has emerged that Korean Re's decision to acquire treasury shares for the third time this year reaffirms its commitment to boosting its stock price.

According to Cape Investment & Securities on the 20th, Korean Re decided on the 17th to acquire 2 million treasury shares. The acquisition period is from that day until July 19, and after the acquisition, the treasury stock holding ratio is expected to be 12.5%. This marks Korean Re's third treasury share acquisition this year, following the first acquisition of 2.5 million shares and the second of 5 million shares.

Kim Do-han, a researcher at Cape Investment & Securities, explained, "Korean Re actually executed treasury share purchases of 2.5 million shares in January and 5 million shares last month based on the acquisition dates. Despite the normalization of last year's performance, valuation recovery did not appear, so it seems they purchased treasury shares on the market. The third consecutive acquisition is interpreted as a reaffirmation of their intention to boost the stock price, which had fallen again due to increased market volatility caused by the COVID-19 pandemic."

Cape Investment & Securities has given Korean Re a 'Buy' rating with a target price of 10,000 won. The closing price on the 17th was 7,960 won. Researcher Kim said, "With the stabilization of the investment portfolio, the biggest risk factor?earnings volatility?has been reduced and performance has normalized. Despite showing a strong commitment to shareholder returns, the company's 12-month forward price-to-book ratio (PBR) is only 0.31 times. Korean Re plans to maintain a dividend payout ratio of over 30%, and the expected dividend yield for 2020 is a high 6.3%. Additionally, considering that the combined ratio of Korean Re will improve if the loss ratio of primary insurers improves due to the spread of COVID-19 is also a factor to consider."

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