[Click eStock] "Meritz Securities, Focus on Strong Q1 Performance... Thanks to IB"

Kyobo Securities Issues 'Buy' Investment Opinion and Sets Target Price at 4,000 Won... Closing Price on 6th at 3,300 Won

[Asia Economy Reporter Kum Bo-ryeong] Despite the slowdown in business conditions, Meritz Securities is attracting attention by showing solid performance in the first quarter.

According to Kyobo Securities on the 7th, Meritz Securities' first-quarter consolidated net profit was confirmed at 102.3 billion KRW, significantly exceeding the consensus of 78.4 billion KRW.

The first-quarter performance was particularly boosted by the Investment Banking (IB) division. Corporate finance fee income reached 143.1 billion KRW, a 61% increase compared to the same period last year. It also rose 2.9% compared to the previous quarter. This was due to deals with high advisory fees being executed. Jeong Tae-jun, a researcher at Yuanta Securities, explained, "While other companies experienced a decline in IB fee income due to the slowdown in the IB sector caused by COVID-19, Meritz Securities' significant increase is encouraging."

With an increase in average daily trading volume, the first-quarter custody fee income was 12.2 billion KRW, up 32.6% and 35.6% compared to the previous quarter and the same period last year, respectively. Asset management income was 3.5 billion KRW, similar to the previous quarter.

The trading division recorded a loss of 58.2 billion KRW on a separate basis. This was affected by a loss of about 25 billion KRW due to increased hedging costs caused by the sharp market decline in March. Researcher Jeong said, "This loss is smaller than estimates and is significantly better compared to other companies," adding, "Volatility in this division is expected to remain lower than that of other companies in the future."

Kyobo Securities gave Meritz Securities a 'Buy' rating with a target price of 4,000 KRW. Kim Ji-young, a researcher at Kyobo Securities, said, "Although financial market instability due to COVID-19 exists, Meritz Securities is expected to maintain solid performance this year through diversified income sources, and with an expected dividend yield of about 5.0% (based on the stock price on the 4th), it remains an attractive dividend stock." Yuanta Securities and Hyundai Motor Securities also set target prices at 4,500 KRW and 4,200 KRW, respectively. On the 6th, Meritz Securities' closing price was 3,300 KRW.

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