[Click eStock] "Samsung Securities Lowers Q2 Earnings Forecast... Target Price Down"

[Asia Economy Reporter Yoonju Hwang] Korea Investment & Securities on the 13th maintained a 'Buy' rating on Samsung Securities but lowered the target price to 45,000 KRW, citing that the second-quarter net profit is expected to significantly underperform consensus.

Yoon Yeo-hoon, a researcher at Korea Investment & Securities, stated, "The second-quarter controlling net profit is expected to be 127.6 billion KRW, which is 19% below consensus." This figure represents a 16% decrease compared to the previous quarter.

Researcher Yoon explained, "Firstly, pure trust fees are expected to be 101.2 billion KRW, down 12% from the previous quarter," adding, "This takes into account an 8% decrease in domestic stocks and a 21% decrease in overseas stocks based on market contract amounts."

Financial product sales revenue is forecasted to be 64.3 billion KRW, a 13% decline from the previous quarter. Researcher Yoon evaluated, "This is mainly due to a 17% decrease in ELS issuance during the same period. Operating profit deteriorated."

However, underwriting and advisory fees, which performed relatively well, are estimated to increase by 18% quarter-on-quarter, centered on structured finance. It was analyzed that structured finance revenue will hold up well alongside the IPOs of RazorCell and Marston Premier REITs.

Operating profit and financial balance are expected to be 123.5 billion KRW, a 20% decrease from the previous quarter. This considers the deterioration in bond operation profits and the base effect of a decrease in valuation gains, including exchange rates, on PI-type investment assets that performed well in the previous quarter.

Researcher Yoon said, "As a result of lowering the ROE (Return on Equity) from 10.8% to 9.8%, the target price was reduced by 10%," and explained, "Considering the decline in brokerage trading volume due to sluggish capital markets and the lowered operating profit estimates."

He added, "Considering the relatively low volatility in operating profit and the policy to maintain a reliable dividend payout ratio, dividend attractiveness may be highlighted during the difficult times toward the end of the year," and "The expected dividend yield for this year is 7.5%."

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