Mirae Asset Daewoo Raises Daily Highs Amid Uncertainty Resolution

Rising 9.18% This Month, Settling Above 10,000 Won... Target Prices Raised One After Another

[Asia Economy Reporter Song Hwajeong] Mirae Asset Daewoo has settled above the 10,000 KRW mark this month, raising its peak price amid the resolution of uncertainties. Following the easing of uncertainties, securities firms have successively raised their investment opinions and target prices for Mirae Asset Daewoo.

According to the Korea Exchange on the 7th, Mirae Asset Daewoo rose 9.18% up to the previous trading day this month. It has steadily increased its peak price while settling above the 10,000 KRW level this month. On the 4th, during trading hours, it rose to 10,700 KRW, marking a 52-week high.

Continuous inflows of institutional buying led to the stock price increase. Institutions have net purchased Mirae Asset Daewoo on all but four days in the past month. During this period, institutions bought 57 billion KRW worth of Mirae Asset Daewoo shares.

The recent strength of Mirae Asset Daewoo is interpreted as resulting from the resolution of uncertainties following a legal victory related to the acquisition of a U.S. hotel. On the 30th of last month (local time), Mirae Asset Daewoo won the first trial in a contract enforcement lawsuit against China's Anbang Insurance at the Delaware Court of Chancery in the U.S. The court ruled that Anbang Insurance must return the deposit to the buyer and pay transaction costs and related litigation expenses. Of the total transaction amount of 5.8 billion USD (approximately 7 trillion KRW), the amount Mirae Asset Daewoo was scheduled to raise, 1.8369 trillion KRW, was included in the judgment amount, which corresponds to about 19.98% of its equity capital.

Jung Junseop, a researcher at NH Investment & Securities, analyzed, "Unless there is a major unexpected event, it is expected that the deposited contract money will be fully refunded. Since no separate provision has been made related to this lawsuit so far, there will be no separate reversal in the future, and it can be seen as the resolution of a major uncertainty."

Lee Hongjae, a researcher at Hana Financial Investment, said, "Since this victory is a first trial ruling, there is a possibility that the legal dispute will be prolonged with a second trial or appeal around the first quarter of next year." However, he added, "Given that the rationality of the contract cancellation due to the poor title insurance contract has already been recognized, the possibility of significant changes to the first trial ruling is limited, so the likelihood of a large contingent risk surrounding Mirae Asset Daewoo has been alleviated."

This year's performance is positive, with the possibility of achieving a pre-tax profit of 1 trillion KRW for the first time in the industry. The researcher explained, "Early redemption of equity-linked securities (ELS) is continuously recovering, and the domestic average daily trading volume is also maintaining a high level, so even from a conservative perspective, it is sufficient to achieve an annual pre-tax profit of 1 trillion KRW for the first time in the domestic securities industry."

Considering the resolution of uncertainties and positive earnings outlook, securities firms have successively raised their investment opinions and target prices for Mirae Asset Daewoo. Hana Financial Investment raised its investment opinion from 'Neutral' to 'Buy' and increased the target price from 10,000 KRW to 12,000 KRW. Shinhan Financial Investment raised the target price by 9.1% to 12,000 KRW. NH Investment & Securities raised it from 9,300 KRW to 15,000 KRW. Im Heeyeon, a researcher at Shinhan Financial Investment, said, "We revised upward the annual earnings estimate by removing impairment losses related to alternative assets that were pre-reflected in the fourth quarter estimates," adding, "It is necessary to pay attention to the excellent investment banking (IB) deal execution capabilities and the ability to consistently generate profits from diversified deals."

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