[Click eStock] "Hanyang Securities, Record Profit Growth... Expected to Emerge as a Major Player"

Yuanta Securities Report

[Asia Economy Reporter Minji Lee] Yuanta Securities presented a buy rating and a target price of 15,000 KRW for Hanyang Securities on the 1st, expecting it to grow into a major player based on its record-breaking profit growth.

Since the management change in 2018, Hanyang Securities has shown record-breaking profit growth starting from 2019. Last year, it succeeded in increasing profits by 107.3%. Although the securities industry overall experienced a boom last year due to an unusual liquidity rally, Hanyang Securities' profit growth rate was overwhelming. Researcher Jung said, “Unlike major firms, despite not benefiting much from the increase in trading volume, the overall profit capacity has grown significantly. However, the stock price only grew by 14.9% in 2019 and 17.5% last year, so undervaluation continues.”

It is also positive that the company is actively recruiting excellent talent to achieve external growth. Since 2018, the number of employees increased by a total of 99 up to the third quarter of last year. This represents about a 43% increase compared to the total number of employees at the end of 2018. Selling and administrative expenses also increased by about 73% on a cumulative basis up to the third quarter of last year. Researcher Jung explained, “Although the rate of increase in selling and administrative expenses was high, the expense ratio improved due to the growth in net operating income. Steady talent recruitment will be an important driving force for growing into a major player.”

Furthermore, being free from regulatory constraints is also an attractive investment point. Regulations on the securities industry, such as real estate PF regulations, strengthened foreign currency soundness management, and the establishment of alternative investment best practice guidelines, generally apply to major firms. Researcher Taejun Jung said, “The company has a small proportion of brokerage and no foreign currency assets, so there are no concerns about the end of the liquidity rally or regulations related to overseas investments. This will act as an opportunity for the company to increase its market share.”

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