[Click eStock] Samsung Securities, Earnings Growth 'Target Price Raised'

by Lee Seonae

Published 19 Apr.2023 07:56(KST)

NH Investment & Securities announced on the 19th that it maintains a buy rating on Samsung Securities and raises the target price from 41,000 KRW to 44,000 KRW. This is due to a 12.1% upward revision in the 2023 expected earnings per share (EPS) estimate and a change in the average timing of the three-year return on equity (ROE) (2023E~2025F).

Yoon Yudong, a researcher at NH Investment & Securities, stated, "The company's outstanding project financing (PF) balance is approximately 2.6 trillion KRW (2 trillion KRW in main PF + 500 billion KRW in bridge loans), with a low proportion of subordinated loans in the main PF. More than half of the bridge loans are indirectly guaranteed, which diversifies risk, so the provision for loan losses is expected to be smaller compared to other companies." He added, "Considering the soundness of the held PF and the annual performance improvement, the current stock price is at an attractive level."

The consolidated net income attributable to controlling interests for Q1 is expected to be 237.9 billion KRW, up 56.7% year-on-year and 1904.4% quarter-on-quarter, likely exceeding both the company's previous estimates and consensus. Brokerage commission income is expected to be 120.4 billion KRW, down 5.3% year-on-year but up 29.3% quarter-on-quarter. This is attributed to the strong weekly trading service, which increased the market share of overseas stocks compared to the previous quarter. Wealth Management (WM) commission income is expected to be 25.4 billion KRW, down 9.5% year-on-year but up 41.4% quarter-on-quarter. The rebound in earnings is anticipated due to increased early repayments amid the global index recovery.

Investment Banking (IB) division commission income is estimated at 36.1 billion KRW, down 20.4% year-on-year but up 23.2% quarter-on-quarter. PF operations are showing a favorable trend compared to the previous quarter. With improved corporate financing conditions, Debt Capital Market (DCM) bond issuance is also strong.