Korea Investment & Securities said on the 21st that for Kiwoom Securities, the resumption of U.S. daytime trading next month and the boom in the domestic stock market are expected to have a sizable effect on domestic stock brokerage fees and interest revenue.
It also raised its target price to 310,000 won from 280,000 won and maintained its buy rating. Kiwoom Securities closed the previous trading day at 248,000 won.
Korea Investment & Securities forecast that Kiwoom Securities' controlling net profit in the third quarter of this year will be 280.6 billion won, in line with market expectations. By segment, domestic stock fee revenue is projected at 96.2 billion won, up 6% from the previous quarter.
Although the average daily transaction value of domestic stocks rose 9% during the period to 25.8 trillion won, the concentration in large-cap stocks increased contracted amounts and Kiwoom Securities' contracted market share fell 2.1 percentage points to 18.2%. Overseas stock fee revenue is expected to increase 4% to 74.5 billion won, while investment banking (IB) fees are projected to decline 6% to 73.7 billion won due to base effects.
Baek Doo-san, an analyst at Kiwoom Securities, said, "Margin lending and deposit gains are each estimated to increase 14% on the back of the stock market boom, and interest profit and loss is estimated to have risen 6% during the period to 186.6 billion won," adding, "Bond trading is weak from the previous quarter, but the sales and trading (S&T) segment and investment operations related to stock trading are expected to post strong results."
Baek said, "From the 4th next month, the resumption of U.S. daytime trading and the domestic stock market boom are expected to expand earnings through domestic stock brokerage fees and interest revenue and the expansion of the investment operations segment."
He added, "As of the listing on the 31st, the remaining overhang is 670,000 shares, which is only 2.5% of the total shares outstanding."