NH Investment & Securities said earnings and capital stability at Samsung Life Insurance are improving, and it expects the company to announce a plan to boost corporate value (value-up) in the near term. It raised its target price to 187,000 won from 156,000 won and maintained a buy rating. The previous trading day's closing price of Samsung Life Insurance was 160,900 won.
NH Investment & Securities estimated Samsung Life Insurance's third-quarter net income attributable to controlling interests at 756.4 billion won. Insurance profit is 413.0 billion won, and investment profit is 519.3 billion won. As sales of high-margin health insurance increase, the contractual service margin (CSM) is projected to reach 828.5 billion won. One-off real estate disposal gains of about 230.0 billion won are also expected to occur.
Jeong Jun-seop, an analyst at NH Investment & Securities, said, "Samsung Life Insurance's earnings capacity is improving over time," and added, "Increases in new-contract CSM based on channel and product competitiveness are steadily lifting insurance profit, and investment profit is also expected to trend upward gradually through domestic and overseas alternative investment equity."
Jeong noted that Samsung Life Insurance has not yet been able to announce a value-up plan, given its high capital sensitivity to regulations, interest rates, and affiliate share price volatility. He said, "As conditions have improved recently, an announcement is expected as early as this year, and specific plans to retire treasury shares held and a long-term, sustainable dividends policy are anticipated."
Recently, as Samsung Life Insurance's share price has risen, the expected dividend yield has fallen into the 3% range. Short-term investment appeal is not great.
However, Jeong said, "Based on improved competitiveness in the core business and proactive value-up measures, the expectation for an upward share-price trend remains valid from a mid- to long-term perspective."