[Click eStock] "Mirae Asset Securities, Positive Shareholder Return Policy... Target Price Raised to 11,000 Won"

On the 23rd, Korea Investment & Securities positively evaluated the recently announced shareholder return policy of Mirae Asset Securities and raised the target stock price from 10,000 KRW to 11,000 KRW. The investment rating was maintained as Buy.

Baek Doosan, a researcher at Korea Investment & Securities, stated, "We applied a price-to-book ratio (PBR) of 0.5 times to the fourth-quarter return on equity (EPS)," adding, "The ROE and cost of capital embedded in the target PBR are 6.0% and 9.9%, respectively, and this improvement in the shareholder return policy has laid the groundwork for enhancing ROE in the mid to long term."

He further explained, "Since treasury shares already held account for about 20% of the total issued shares, various favorable policies related to the disposal of treasury shares aligned with the corporate value-up program could emerge, which is also positive for the stock price."

Mirae Asset Securities decided to cancel at least 15 million common shares and 1 million Class 2 preferred shares annually. Based on the closing price on the 22nd, this corresponds to an amount of 137.7 billion KRW. This represents 42% of last year's net profit and 21% of the expected net profit for this year.

Researcher Baek viewed, "Even considering the characteristic volatility of net profit, a mechanism has been established to achieve a significant portion of shareholder returns through treasury share cancellations."

Mirae Asset Securities' shareholder return ratio for 2023 was 52.6%, an increase of 19.7 percentage points compared to the previous year, exceeding expectations. Although the shareholder return amount decreased from 210.1 billion KRW in 2022 to 172.0 billion KRW in 2023 due to poor performance caused by losses related to overseas commercial real estate,

Researcher Baek explained, "A precedent has been set that the volatility of shareholder returns relative to performance can be reduced through flexible upward adjustments of the shareholder return ratio in response to poor performance."

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