Korea Investment Holdings reported its highest performance since its foundation in the first quarter of this year (January to March), and securities firms are raising their target prices one after another, forecasting strong performance in the second half.
Korea Investment Holdings announced on the 14th that it recorded a consolidated net profit of 458.4 billion won in the first quarter of this year. This figure represents a 34.7% increase compared to the same period last year, surpassing the average forecast of securities firms by more than 30%. Operating profit reached 529.6 billion won, a 38.8% increase year on year.
Park Hye-jin, a researcher at DAISHIN SECURITIES, noted, "The increase in transaction volume not only boosted brokerage revenue but also led to record investment banking (IB) fee revenue of 127.5 billion won. In particular, revenue related to project financing (PF) and mergers and acquisitions (M&A) saw significant growth."
Park added that this is interpreted as a result of the easing of provisions that had constrained operations until the end of last year, and concluded that the subsidiaries of Korea Investment Holdings have also recovered to a normal profit level. Consequently, he adjusted the target price upward from 100,000 won to 120,000 won.
On the same day, Shinhan Investment Corp. (90,000 won → 115,000 won), Mirae Asset Securities (110,000 won → 120,000 won), and MERITZ Securities (97,000 won → 110,000 won) all raised their target prices.
Kang Seung-geun, a researcher at KB Securities, said, "With the forecast of comprehensive investment account (IMA) approval applications in the second half, the expansion of the deposit base will improve the profitability of investment banking (IB) and trading."
He also mentioned, "Considering the decline in market interest rates and exchange rates in the second quarter (April to June), outstanding performance is expected compared to competitors," and he raised the target price from the previous 100,000 won to 113,000 won, presenting Korea Investment Holdings as the top pick in the securities sector.