[Click eStock] "Hanwha Life Insurance, Insurance Profit Stagnation... Target Price Down"

Ebest Investment & Securities lowered the target price for Hanwha Life from 3,000 KRW to 2,600 KRW on the 18th. The investment opinion was maintained at 'Hold'.

Hanwha Life recorded a net profit of 156.4 billion KRW in the second quarter, down 55% compared to the same period last year. Insurance profit was 195.1 billion KRW, a decrease of 4%, but investment loss recorded a loss of 41.1 billion KRW, showing significant weakness. The deterioration in investment profit was due to large-scale valuation losses in special accounts.

The key profit indicator, Contractual Service Margin (CSM), stood at 10.1 trillion KRW as of the end of the second quarter, an increase of 404.2 billion KRW compared to the end of the first quarter. However, new contract CSM during the quarter was 787.7 billion KRW, but adjustment items reached -220 billion KRW due to increased lapse rates. The profitability of protection-type new contracts (CSM/APE) recorded 107% in the second quarter, slowing down compared to 144% in the same period last year. The company has expressed its intention to pay dividends, but whether high growth in new contracts continues in the second half and the trend of profitability will be key factors.

Jeon Bae-seung, a researcher at Ebest Investment & Securities, said, "We lowered the target price reflecting changes in earnings estimates and maintain a Hold rating," adding, "Whether the high-interest-rate environment continues and whether the increased surface profit will lead to expanded shareholder returns will remain ongoing points of interest."

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