[Click eStock] "Hana Financial, Expectation of Exchange Rate Stability... Maintains Top Sector Pick"

Hana Securities maintained its 'top pick' rating within the industry for Hana Financial Group on the 22nd, expecting the company's Q4 earnings last year to exceed market expectations. The target stock price (82,000 KRW) and investment opinion (buy) were also maintained.

Choi Jung-wook, a researcher at Hana Securities, projected that Hana Securities' estimated Q4 net profit would be about 576 billion KRW, a 30% increase compared to the same period last year, surpassing the consensus (average forecast by securities firms). Researcher Choi explained, "Although there are significant concerns that earnings might fall short of consensus due to foreign currency translation losses caused by the rise in the KRW-USD exchange rate, substantial securities-related profits resulting from the decline in market interest rates are expected to largely offset this."

Hana Financial Group, recognized as a representative exchange rate-sensitive stock within the industry, is also expected to gradually gain shareholder return capacity following the inauguration of U.S. President Donald Trump. Researcher Choi said, "The exchange rate, which had been soaring for some time, is expected to gradually stabilize after Trump's inauguration, making this a noteworthy period. Exchange rate concerns affect foreign investors more than domestic institutions, so if the exchange rate stabilizes, foreign buying momentum is also expected to quickly return."

Further expansion of shareholder returns is also anticipated. Hana Financial Group's Common Equity Tier 1 (CET1) ratio at the end of Q3 was 13.17%. There are significant concerns that factors such as the rise in the KRW-USD exchange rate and share buybacks, along with the expected year-end dividend, might cause the year-end CET1 ratio to fall short of the 13.0% threshold required for shareholder return expansion as announced in the value-up disclosure. Researcher Choi analyzed, "The financial authorities have decided to exclude the increased market risk from exchange rate fluctuations on overseas subsidiaries' equity from risk-weighted assets (RWA), which is expected to somewhat reduce the impact of exchange rate-related capital ratio declines. Additionally, active RWA management efforts such as loan contraction in Q4 and the sale of high-risk-weighted assets are anticipated. Although it is difficult to be certain, the CET1 ratio required for shareholder return expansion of 13% is expected to be maintained. Therefore, the scale of share buybacks and cancellations to be announced in the financial results could increase to about 350 to 400 billion KRW, up from 300 billion KRW in the same period last year." Hana Securities forecasted Hana Financial Group's total shareholder return ratio to be 43.3% in 2025 and 47.2% in 2026.

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