[Click eStock] "Mirae Asset Daewoo's Q1 IB and Trading Performance Stronger Than Expected"

Korea Investment & Securities Issues 'Neutral' Investment Opinion... Closing Price 5,350 Won on 28th

[Asia Economy Reporter Kum Bo-ryeong] An analysis has emerged that Mirae Asset Daewoo's investment banking (IB) and trading (S&T) divisions performed more robustly than expected in the first quarter.

According to Korea Investment & Securities on the 29th, Mirae Asset Daewoo's first-quarter net income attributable to controlling interests was 107.8 billion KRW, surpassing consensus estimates. IB fees performed well, centered on project financing (PF), advisory, and debt guarantees, and trading also held up well. Additionally, even overseas subsidiaries showed strong results.

By business division, brokerage net revenue was 143.2 billion KRW, a 71% increase compared to the previous quarter. During the same period, the average daily trading volume in the domestic market increased by 51%, leading to a 51% increase in domestic commission fees, while overseas commission fees rose 137% compared to the previous quarter. Asset management net revenue increased by only 2% from the previous quarter, as fees from equity-linked securities (ELS) and derivative-linked securities (DLS) decreased despite increases in fund and pension balances.

Baek Doo-san, a researcher at Korea Investment & Securities, explained, "IB net revenue was 78.2 billion KRW, down 16% from the previous quarter. This was due to a 74% decrease in underwriting fees compared to the previous quarter caused by the COVID-19 pandemic." However, he added, "Various alternative investment deals continuing since last year were recognized, resulting in a 31% increase in fees related to PF, advisory, and debt guarantees compared to the previous quarter, contributing to the smooth landing of overall IB revenue."

S&T net revenue was 55.2 billion KRW, down 60% from the previous quarter, but the performance was better than concerns suggested. Researcher Baek emphasized, "The ELS self-hedge ratio is low at 30%, and losses were limited due to appropriate management strategies." He also highlighted, "Dividend and distribution income generated from investment purpose assets, which have now reached 8 trillion KRW, increased by 30 to 40 billion KRW compared to the previous quarter, partially offsetting the sharp decline in S&T revenue."

Korea Investment & Securities has given Mirae Asset Daewoo a 'Neutral' investment rating. Researcher Baek stated, "Although S&T revenue is expected to improve significantly in the second quarter, IB fees and dividend and distribution income are expected to decline in contrast." Mirae Asset Daewoo's closing price on the 28th was 5,350 KRW.

This content was produced with the assistance of AI translation services.