[Click e-Stock] Expectations Rise on Improved Financial Valuations and First Semiannual Dividend... Target Price Up 5% for This Stock

NH Investment & Securities has raised its target price for Industrial Bank of Korea from 26,500 won to 28,000 won. The investment opinion remains a buy.

On May 21, Jeong Junseop, a researcher at NH Investment & Securities, stated, "The improvement in the valuation of private financial holding companies is expected to have a positive impact on Industrial Bank of Korea."

The bank's implementation of semiannual dividends for the first time this year also raises expectations. Researcher Jeong commented, "The expected dividend per share (DPS) for the second quarter of this year is 200 won, which is smaller than the year-end dividend of 817 won. However, it is meaningful in that it marks the first step toward reducing share price volatility and attracting long-term investors."

However, there are concerns as the gap in capital policy and shareholder return is widening compared to private financial holding companies. Researcher Jeong explained, "Many financial holding companies are working to enhance their return on equity (ROE) through efficient capital allocation, maximize total shareholder return (TSR) through an appropriate combination of dividends and share buybacks, and ensure evenly distributed quarterly dividends. Even if Industrial Bank of Korea implements more shareholder-friendly policies than other public enterprises or general listed companies, shareholders are likely to compare Industrial Bank of Korea to other banking stocks."

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