[Click eStock] "Woori Financial Group, High Profitability Continues in Q3"

[Asia Economy Reporter Ji-hwan Park] Ebest Investment & Securities stated on the 7th that Woori Financial Group is expected to maintain high profitability in the third quarter as well. They maintained the investment opinion 'Buy' and the target price of 14,000 KRW.

Researcher Bae-seung Jeon of Ebest Investment & Securities said, "High profitability is expected to continue in the third quarter, with the estimated net profit for the third quarter at 716 billion KRW, exceeding market expectations and continuing a strong performance trend."

It is analyzed that the increase in interest income continues to drive profit growth, while low provisions for bad debts and selling and administrative expenses are expected to maintain high profitability. Researcher Jeon said, "Despite a decrease in non-interest income compared to the first half, core profit growth and low cost burden are expected to result in a return on equity (ROE) of over 10%. Additionally, a special factor in the third quarter is expected to be 70 billion KRW in equity-method gains related to K-Bank."

The continued improvement trend in ordinary profit is also positive. With the effect of declining funding costs coming to an end, the net interest margin (NIM) is expected to decrease by 1 basis point compared to the previous quarter in the third quarter, but interest income growth is expected to be maintained based on a high loan growth rate of 2.3%. Researcher Jeon forecasted, "Although provisions for bad debts are expected to increase due to the disappearance of the previous quarter's provision reversal effect (50 billion KRW), it will remain within ordinary levels, and the performance of other subsidiaries such as card and capital companies is also expected to continue a solid trend." Even considering the possibility of conservative cost recognition in the fourth quarter, the expected net profit for this year is estimated to reach 2.3 trillion KRW, indicating significant profit growth and expansion of ordinary profitability.

Researcher Jeon evaluated, "The current stock price with a price-to-book ratio (PBR) of 0.35 times is significantly undervalued compared to the expected profitability," adding, "With substantial performance improvement and recovery of dividend payout ratio, the annual dividend yield is also expected to exceed 7%, making it attractive for high dividends."

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