Samsung Securities Catches Two Rabbits with Strong Earnings and Dividends

[Asia Economy Reporter Ji-hwan Park] Korea Investment & Securities analyzed on the 7th that Samsung Securities recorded strong earnings in the third quarter of this year, showing an increase compared to the previous quarter despite concerns about profit decline, and that it possesses both earnings stability and dividend attractiveness. They gave a 'Buy' rating and a target price of 62,000 KRW.

Baek Doo-san, a researcher at Korea Investment & Securities, stated, "The controlling net profit for the third quarter was 268.2 billion KRW, exceeding consensus by 33%," and added, "Although there were concerns about profit decline, it actually increased by 1% compared to the previous quarter." He attributed this to stronger-than-expected financial product sales revenue, operating profit, and financial income.

Net trust fees were 170.6 billion KRW, down 9% from the previous quarter. Fees from overseas stocks increased by 8% to 34 billion KRW due to expanded trading volume. However, domestic stock fees decreased by 12% during the same period.

Financial product sales revenue rose 27% from the previous quarter to 138.6 billion KRW. Derivative-linked securities fees recorded 104.5 billion KRW, increasing 34% quarter-on-quarter due to strong early redemption gains. Researcher Baek said, "At the end of the third quarter, wrap account balances reached 4.9 trillion KRW, up about 26% from the previous quarter," adding, "Fund and trust balances also increased by 6% each during the same period."

Operating profit and financial income totaled 202.5 billion KRW, down 6% from the previous quarter. Although there were concerns about decreased bond operation profits, hedge gains related to derivative-linked securities improved. Additionally, financial income continued to improve compared to the same period last year due to balance expansion and sustained yield improvement.

Underwriting and advisory fees were 60.3 billion KRW, up 1% from the previous quarter, while structured finance revenue temporarily decreased by 23% to 38.7 billion KRW. Researcher Baek evaluated, "However, with support from M&A and ECM, the overall underwriting and advisory fee performance held up well, and considering the strong earnings and dividend attractiveness, we maintain it as a top pick."

Researcher Baek emphasized, "Concerns about earnings decline have been dispelled with strong third-quarter results," and added, "By demonstrating adequate operating profit and earnings generation capability related to derivative-linked securities, earnings stability and year-end dividend attractiveness have been highlighted despite an unfavorable interest rate environment."

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