Yuanta Securities Korea said on the 21st that Samsung Securities is expected to see improved earnings in the fourth quarter of this year as transaction value increases and a dividend yield of more than 5% is anticipated. It raised its target price by 37.7% to 96,000 won from 69,000 won, while maintaining a Buy rating. The previous trading day's closing price of Samsung Securities was 79,600 won.
Samsung Securities' third-quarter net income attributable to controlling shareholders was 309.2 billion won, beating market expectations by 21.8%. This was thanks to solid performance in the other parts excluding trading gains and losses.
Brokerage (commissioned trading) fees rose 21.9% from the previous quarter as transaction value increased, and investment banking (IB) and other income climbed 45.6% from the previous quarter.
Brokerage interest income also rose 3.6% from the previous quarter due to the increase in transaction value. Trading and product gains and losses fell 10.1% from the previous quarter as bond valuation gains decreased amid rising bond yields.
Yuanta Securities Korea projected a 5.1% dividend yield for Samsung Securities. Woo Do-hyung, an analyst at Yuanta Securities Korea, said, "Samsung Securities has released a shareholder return policy of a consolidation-based payout ratio of at least 35%, and the year-end payout ratio this year is expected to be 35.5%, with a base dividend per share (DPS) of 4,000 won." Samsung Securities' record date for dividends is the end of December.
Benefits from the increase in fourth-quarter transaction value are also expected. In the previous month, the domestic average daily transaction value was 40.3 trillion won, far exceeding the third quarter's average daily transaction value of 25.8 trillion won.
Woo said, "Overseas transaction value also increased significantly in the previous month, and fourth-quarter brokerage revenue is expected to be solid," adding, "Samsung Securities, where brokerage accounts for a relatively high share of net operating profit, is expected to benefit."