[Click eStock] Kiwoom Securities Shows Better Performance Compared to Peers... Target Price Lowered

[Asia Economy Reporter Hwang Yoon-joo] Korea Investment & Securities maintained a 'Buy' rating on Kiwoom Securities on the 15th, stating that its first-quarter earnings are expected to be better than those of other companies, but lowered the target price by 12% to 150,000 KRW.

Baek Doosan, a researcher at Kiwoom Securities, stated, "The first-quarter net income attributable to controlling interests is expected to be 161.1 billion KRW, which is 9% below consensus."

Researcher Baek explained, "Retail net operating income (net revenue) for the first quarter is expected to be 194.9 billion KRW, down 16% from the previous quarter," adding, "Domestic stock contracts decreased by 19% during the same period, but overseas stock contracts only fell by a single digit, so the performance is relatively favorable."

As the reason for better performance compared to other securities firms, he cited robust trading demand for Tesla, Nvidia, Apple, and Nasdaq ETFs due to increased volatility in the U.S. stock market. He also evaluated that a slight increase in average credit lending balances, which boosted financial income, contributed to the favorable retail performance.

Researcher Baek analyzed, "IB net income is expected to be 44.2 billion KRW, up 33% from the previous quarter," attributing this to increased alternative investment and project financing (PF) income despite sluggish IPOs.

Wholesale is estimated to have increased by 19% quarter-on-quarter to 23.4 billion KRW due to a base effect. Although investment management (PI) underperformed due to increased stock market volatility, dividend income of 20.3 billion KRW from Woori Financial Group likely offset some of the losses.

Researcher Baek added, "Although Kiwoom Securities is performing better than other companies, a downward revision of brokerage trading volume expectations across the industry is inevitable," and "ROE for 2022 is also estimated to decline from 18.2% to 16.7%."

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