[Click e-Stock] "Hanwha Life Insurance: Target Price Raised on Consolidated Earnings"

On April 14, NH Investment & Securities raised its target price for Hanwha Life Insurance to 6,300 won, reflecting consolidated earnings, and maintained its "Buy" investment opinion.

Jung Joonseop, a researcher at NH Investment & Securities, stated, "Until now, the company's earnings announcements and market valuation standards have been based on separate financial statements, but the gap between separate and consolidated earnings is widening." He added, "While the core insurance business remains sluggish, major subsidiaries such as non-life insurance, asset management, and financial services have shown improved performance. Overseas subsidiaries in which the company holds equity stakes, such as Nobu Bank and Velocity Securities, are also delivering solid results." Last year, Hanwha Life Insurance recorded a net profit of 313.3 billion won on a separate basis, but a controlling net profit of 634.1 billion won on a consolidated basis.

Currently, Hanwha Life Insurance's price-to-book ratio (PBR) stands at only 0.3. Despite strong consolidated earnings, the company is unable to resume dividend payouts for several years when assessed under the surrender value reserve calculation standard. The most significant factor determining the stock price of financial companies is shareholder returns.

However, NH Investment & Securities expects that, as financial authorities are promoting improvements to the reserve calculation formula, there is potential for securing distributable profits and resuming dividend payouts in the future. In addition, as the government is showing a willingness to improve the valuation of low-PBR stocks, the company is also expected to benefit from relevant policy measures.

Researcher Jung added, "Above all, the industry's ability to voice its opinion on valuation improvement has strengthened compared to the past," continuing, "Depending on government policy or market conditions, there is room for the current valuation to improve going forward."

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