[Click eStock] "Securities Sector Expected to Show Strong Q4 Performance... Top Pick is NH Investment & Securities"

Yuanta Securities stated on the 27th that the stock price of the securities sector after the ex-dividend date depends on the fourth-quarter earnings, recommending NH Investment & Securities as the top pick from a conservative perspective.

The ex-dividend dates for Samsung Securities and Kiwoom Securities are December 27, while the dividend record dates for NH Investment & Securities, Mirae Asset Securities, and Korea Financial Group are expected to be at the end of March.

Researcher Woo Dohyung said, "Based on the stock prices on the 26th, the dividend yields for Samsung Securities and Kiwoom Securities are 7.7% and 5.8%, respectively, and a stock price decline of about 4-6% is expected due to the ex-dividend date," adding, "The expected dividend yields for NH Investment, Mirae Asset, and Korea Investment & Securities are 6.7%, 4.1%, and 5.8%, respectively."

Researcher Woo predicted, "Whether the stock price recovers after the ex-dividend date will likely depend on earnings forecasts, with investors focusing on the fourth-quarter earnings to be announced in February," and added, "The fourth-quarter earnings are expected to be favorable."

He noted, "If there are no special issues regarding additional reserve provisions, the fourth-quarter earnings of securities firms are expected to be better than consensus estimates," pointing out, "The trading volume and credit balance in the domestic stock market for the fourth quarter are 16.1 trillion KRW and 35.5 trillion KRW, respectively, which are not significantly different from previous estimates."

Researcher Woo added, "However, the trading volume of foreign currency securities is expected to increase by 23.8% compared to the third quarter, exceeding previous estimates by 22.8%," and said, "The net operating income of covered securities firms is expected to increase by approximately 6 to 15 billion KRW due to the rise in overseas trading volume, representing an increase of about 1-2%."

He also stated, "Regarding the investment banking (IB) division and other income, a conservative estimate for the fourth quarter suggests no significant volatility," and explained, "Trading profits are expected to be favorable as the 3-year government bond yield fell by 16.3 basis points (bp; 0.01 percentage points) compared to the end of the third quarter, but considering the 37.1 bp decline in the third quarter and the sluggish stock market in the fourth quarter, consensus levels are anticipated."

Accordingly, among the covered securities firms, NH Investment & Securities, which has the highest dividend yield until the earnings announcement, was recommended as the top pick from a conservative perspective.

Researcher Woo explained, "Considering economic uncertainties, a conservative approach is necessary," adding, "Except for Samsung Securities and Kiwoom Securities, other securities firms are expected to announce their dividend per share (DPS) at the earnings announcement in February next year."

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