Shinhan Financial Group Undervalued Compared to Intrinsic Value... Target Price Raised [Click e-Stock]

NH Investment & Securities Raises Target Price for Shinhan Financial Group

On May 21, NH Investment & Securities announced that Shinhan Financial Group's stock price is undervalued compared to its intrinsic value, raising its target price by 16.8% from the previous level to 139,000 won.

Jung Joonseop, a researcher at NH Investment & Securities, stated, "Shinhan Financial Group recently announced a new plan to enhance corporate value," adding, "The company intends to expand shareholder returns while maintaining a dividend payout ratio of over 50%. It will also improve return on equity (ROE) by focusing on non-banking businesses (securities, credit card companies), and as the stock price rises in the future, it plans to increase the proportion of dividends."

Researcher Jung explained, "The securities division will boost ROE through capital market benefits, while the credit card business will enhance ROE through cost reduction," and predicted, "As the capital market remains strong, securities firms are expected to see a much larger increase in ROE starting this year compared to before." He added, "For credit card companies, ROE improvement is expected from next year due to reduced costs resulting from the expiration of non-profitable products (Damoe) and workforce optimization."

He emphasized, "The key to Shinhan Financial Group's medium- to long-term ROE improvement will be its capital company," noting, "Banks, insurance, and credit card businesses face practical limitations in external growth, and since the securities division is set to normalize its performance from this year, the remaining additional growth potential lies with the capital business."

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