"Surging Trading Volumes Mean More Profit for Me"... Kiwoom Securities Set to Advance Further [Click e-Stock]

Commission and Margin Interest Revenue on the Rise
New Business Ventures Needed... Issuance-Based Notes and Retirement Pension Entry Anticipated

As interest in the domestic stock market grows and trading volumes increase, Kiwoom Securities is expected to generate substantial commission income. However, analysts point out that the company has weaknesses in areas such as the retirement pension business and overseas stocks, so it needs to seek ways to maintain its profit-generating capacity through new business ventures.

On April 22, iM Securities newly set a target price of 5.5 million won for Kiwoom Securities and initiated coverage with a 'Buy' recommendation. The previous day's regular session closing price was 4,515,000 won. This is based on the assessment that Kiwoom Securities is a direct beneficiary of policies aimed at revitalizing the domestic stock market.

Kiwoom Securities holds the number one share in domestic stock market trading volumes, supported by a broad customer base using its Mobile Trading System (MTS). Since last year, with the launch of NextTrade and policies to boost the domestic stock market, trading volumes have risen sharply. iM Securities explained that Kiwoom Securities is expected to demonstrate the strongest profit-generating capacity in the industry, mainly through its commission income from brokerage and margin trading. Although rising bond yields due to factors such as the conflict between the United States and Iran present some challenges for the securities industry, Kiwoom Securities is expected to be less affected, thanks to its relatively high proportion of equity assets in its portfolio.

Based on this, iM Securities forecasts that Kiwoom Securities’ net profit attributable to controlling shareholders this year will reach 1.4489 trillion won, a 30.1% increase from the same period last year. Of this, commission income alone is projected at 1.5856 trillion won, up 51.4% year-on-year. Net interest income is estimated to be 808.9 billion won, a 4.2% increase over the same period.

However, there are also hurdles to overcome, particularly the excessive reliance on the brokerage-centered business structure. Recently, exchange-traded fund (ETF) trading has become more active, especially in retirement pension accounts, but Kiwoom Securities has yet to enter the retirement pension business. Its share of trading volumes is also declining, and competition with latecomers in overseas stocks is intensifying. Seol Yongjin, a researcher at iM Securities, said, “It is necessary to strengthen mid- to long-term competitiveness based on the current robust profit-generating capacity,” adding, “New business entries this year, such as retirement pensions and issuance-based notes, are positive developments from this perspective.”

Meanwhile, this year’s shareholder return policy is expected to focus on dividends. The common stock dividend per share (DPS) is projected at 16,000 won, with a dividend yield of 3.6%. Researcher Seol commented, “In the case of issuance-based notes, after analyzing customer holding patterns for liquidity management, Kiwoom Securities plans to aggressively expand investment, which will likely drive profit growth from the second half of the year.” He added, “The key going forward will be whether the company can maintain its current market share by expanding ETF-driven trading following the launch of its retirement pension business.”

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