[Click eStock] "Hanyang Securities, Significantly Undervalued Stock Price... Target Price Up 15%"

[Asia Economy Reporter Park Jihwan] Yuanta Securities maintained a 'Buy' investment rating on Hanyang Securities on the 19th, stating that the stock price is significantly undervalued compared to its earnings, and raised the target price by 15% from 20,000 KRW to 23,000 KRW.

Jeong Taejun, a researcher at Yuanta Securities, said, "Hanyang Securities' Q2 profit increased by 137.5% year-on-year and 5.2% quarter-on-quarter to 25.8 billion KRW, achieving an earnings surprise," adding that "IB, other fee income, and trading and product gains maintained high growth regardless of market conditions."

Since the current management took office in 2018, the company has realized profits from trading and product gains every quarter regardless of market conditions, and it is evaluated that the capacity to expand project financing (PF) through continuous high growth is increasing. Because the proportion of brokerage commissions is low, it is analyzed that even if the stock market slows down due to future base rate hikes and other securities firms' earnings decline, Hanyang Securities will maintain a distinctive growth trend.

Despite the return on equity (ROE) expected to reach 24.0% this year and 20.6% next year, the forecasted price-earnings ratio (PER) for this year is only 2.4 times, and the dividend yield is 7.7%, indicating significant undervaluation. Even if the target price is reached, the PER would be around 3.2 times.

Researcher Jeong Taejun stated, "Since the company does not sell equity-linked securities (ELS), it is free from volatility caused by ELS hedging," and added, "assuming a dividend payout ratio similar to last year, the dividend per share (DPS) for this year is 1,350 KRW, and the dividend yield is 7.7%, ranking among the top in the financial industry."

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