[Click eStock] "NH Investment & Securities Raises Profit Forecast for This Year... Target Price Up"

On the 7th, KB Securities raised its profit forecast for NH Investment & Securities this year. Accordingly, it maintained a 'Buy' investment rating and raised the target price to 12,500 KRW.

Seunggeon Kang, a researcher at NH Investment & Securities, stated, "Due to large-scale fee income related to acquisition financing and dividends/distributions from the exit of private equity (PE) investments being reflected significantly in the second quarter, we raised the 2023 profit forecast by 13.6%." This is because the trading and product profit and loss, which were highly volatile last year, are stabilizing, leading to an increase in the sustainable ROE used to calculate the target price by 0.2 percentage points to 6.7%.

The controlling shareholder net profit in the second quarter was 182.7 billion KRW, exceeding consensus by 35.5%. This represents a 52.6% increase compared to the same period last year. Researcher Kang explained, "The reason for significantly exceeding consensus is that fee income related to acquisition financing increased sharply to 68.7 billion KRW (6.9 billion KRW in the first quarter) due to large deals related to acquisition financing, and approximately 52 billion KRW in dividend/distribution income was reflected from the exit of PEFs in which we participated as GP."

Researcher Kang evaluated, "Although the operating environment for real estate finance has not yet recovered, we view positively the significant improvement in IB performance due to the execution of several large deals." IB performance was 115.3 billion KRW, down 4.3% year-on-year but up 159.8% quarter-on-quarter.

Regarding trading and product profit and loss, it decreased by 28.0% quarter-on-quarter due to the impact of rising interest rates, but dividend/distribution income was realized at 135.7 billion KRW reflecting the PEF exit effect. This is an 80.2% increase compared to the same period last year and significantly exceeded expectations. The ROE for the second quarter was around 10.0%.

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