LS Securities analyzed on the 20th that NH Investment & Securities' corporate value enhancement plan includes share buybacks and cancellations in addition to basic dividends, and that the highest level of shareholder return in the industry will be maintained. It also maintained a buy investment rating and raised the target stock price from 15,500 won to 16,500 won, an increase of 6%. On the previous trading day, NH Investment & Securities closed at 13,870 won.
On the 19th, NH Investment & Securities was the fourth among securities firms to announce its corporate value enhancement plan. The main content is to secure a return on equity (ROE) of 12% by 2028 and achieve a price-to-book ratio (PBR) of 1 through a shareholder return policy. LS Securities predicted that NH Investment & Securities' ROE and PBR for 2024 will be 9.0% and 0.61, respectively.
Jeon Bae-seung, a research institute at LS Securities, noted, "Given the current net profit size and the high volatility of profits characteristic of the securities industry, it is not an easy task," but added, "Based on the strengths of the investment banking institutional sector, profitability improvement is ongoing and considering the average ROE level of top companies in the industry, it is not considered an impossible level." To achieve this corporate value enhancement plan, NH Investment & Securities' expected capital scale by 2028 is between 9.5 trillion won and 10 trillion won, and net profit is expected to reach between 1.1 trillion won and 1.2 trillion won.
The former research institute also stated, "Unlike other securities firms, NH Investment & Securities has not presented a target total shareholder return rate; instead, it has set a basic dividend of 500 won and announced plans for additional dividends and share buybacks and cancellations," adding, "It is already conducting shareholder returns in line with the target total shareholder return level of 50% set by other securities firms and financial holding companies."
The former research institute also predicted, "I expect that the industry's highest level of shareholder return will continue by combining basic dividends with share buybacks and cancellations," and noted, "Based on this year's performance improvement, the expected dividend yield is also expected to reach 6.5%."