Securities Firms Achieve Record-Breaking Profits Amid Donghak Ants Boom, Mirae Asset Daewoo Opens Era of 1 Trillion KRW Operating Profit

Mirae Asset Daewoo, Industry's First to Surpass 1 Trillion Won
NH Investment & Securities 787.3 Billion Won 37%↑
Hyundai Motor Securities Highest Since Establishment

[Asia Economy Reporter Song Hwajeong] Last year, the surge in stock investment led to a sharp increase in trading volume, resulting in securities firms posting record-breaking earnings. In particular, Mirae Asset Daewoo became the first in the industry to achieve an annual operating profit of 1 trillion KRW.

According to the Financial Supervisory Service's electronic disclosure system on the 29th, Mirae Asset Daewoo announced that it recorded consolidated sales of 16.8905 trillion KRW, operating profit of 1.1047 trillion KRW, and net profit of 818.3 billion KRW last year. Operating profit surged 51.76% year-on-year, marking the first time in the securities industry to reach 1 trillion KRW. Sales and net profit also increased by 9.42% and 23.19%, respectively. A Mirae Asset Daewoo official explained, "We opened the era of pre-tax profit of 1 trillion KRW by showing balanced performance across all business divisions including overseas business, wealth management (WM), investment banking (IB), and trading."

NH Investment & Securities also announced that its consolidated sales last year reached 12.3385 trillion KRW, up 7.3% year-on-year, and operating profit was 787.2 billion KRW, a 36.8% increase, according to provisional figures disclosed the day before. Net profit rose 21.1% year-on-year to 576.9 billion KRW, setting a new record high. NH Investment & Securities attributed the earnings growth to increased brokerage, financial product sales, and IB division commission income, improved asset management and related interest income, and increased interest income related to securities loans and deposits.

Hyundai Motor Securities recorded consolidated sales of 840 billion KRW, operating profit of 131.5 billion KRW, and net profit of 94.6 billion KRW last year. Operating profit and net profit increased by 33.6% and 31.8% year-on-year, respectively, achieving the highest performance since its founding. The WM division posted record-high results, all branches succeeded in turning a profit, and the proprietary investment (PI) division supported earnings by securing stable dividend income and valuation gains from previously invested high-quality domestic and overseas assets.

Due to the stock investment boom among individual investors last year, trading volume surged, and securities firms are expected to continue announcing record-breaking earnings. According to Samsung Securities, the average daily trading volume in the fourth quarter of last year was 27.6 trillion KRW, maintaining a level similar to the previous quarter and increasing 182.8% compared to the same period last year. Margin loan balances and customer deposits rose 17.7% and 21.6% quarter-on-quarter to 19.6 trillion KRW and 65.5 trillion KRW, respectively. Samsung Securities researcher Jang Hyoseon predicted, "Due to the money move phenomenon into the stock market, continued strong brokerage performance, and better-than-expected trading results amid concerns over the recovery of principal repayments of equity-linked securities (ELS), major securities firms' fourth-quarter earnings are expected to exceed consensus."

Strong earnings are also expected for securities firms this year. Researcher Jang said, "The annual earnings consensus for securities firms is expected to continue rising," adding, "Considering the environment surrounding the securities industry, including increased trading volume, recovery of ELS profit contribution, and steady IB income, the possibility of a sharp decline in earnings this year is low."

Despite these earnings improvements, stock prices are still considered undervalued. Park Hyejin, a researcher at Daishin Securities, analyzed, "Trading volume is expected to remain strong for the time being, and above all, trading profits, which reflected significant losses in the first quarter, are normalizing, so securities firms' earnings are likely to increase this year." She added, "The average return on equity (ROE) for the five analyzed securities firms (Korea Financial Group, NH Investment & Securities, Mirae Asset Daewoo, Samsung Securities, Kiwoom Securities) is expected to be 12% this year, but the price-to-book ratio (PBR) is only 0.69 times and the price-to-earnings ratio (PER) is 6.1 times, indicating that stocks are still undervalued."

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