Korea Investment & Securities Co. said on the 13th that while multiple share price momentum factors exist for Mirae Asset Securities, there is limited room for further upside from a valuation perspective. It maintained a "neutral" investment opinion.
Korea Investment & Securities Co. estimated that Mirae Asset Securities recorded 365.2 billion won in controlling net profit in the fourth quarter of last year (October–December). That is 19% above the market consensus (forecast).
Baek Doo-san, an analyst at Korea Investment & Securities Co., said, "We estimated quarterly net gains on investment-purpose assets at 92 billion won, taking into account 170 billion won in valuation gains on overseas innovative companies related to artificial intelligence (AI) and valuation losses related to overseas alternative investments," adding, "We assumed that valuation gains on space-related overseas innovative companies will be recognized at 560 billion won in the first quarter of this year."
By segment, brokerage fees are expected to increase 29% from the previous quarter to 337.5 billion won. The assumption is a 32% increase in domestic stocks and a 23% increase in overseas stocks. Trading profit and loss is estimated at 201.8 billion won, up 4%, and interest profit and loss at 45.6 billion won, up 176%.
However, Baek said that despite the share price momentum of Mirae Asset Securities, there is limited room for further upside from a valuation perspective. Based on the number of shares outstanding assuming the total cancellation of treasury shares, the expected price-to-book ratio (PBR) for this year is 1.09 times. Considering that the expected return on equity (ROE) for this year, when valuation gains on innovative companies will be largely reflected, is 11.6%, the current share price is judged to have already priced in a significant portion of the positives.
Baek said, "What matters going forward is the profitability path of investment-purpose assets and shareholder returns," adding that under the assumption of canceling all 23.62 million common treasury shares, last year's shareholder return ratio is projected at 35.7%.