NH Investment & Securities on the 9th positively assessed that shareholder returns at Woori Financial Group, including dividends and share buybacks, are steadily expanding. It accordingly raised its target price to 40,000 won from 36,000 won. The previous trading day's closing price of Woori Financial Group was 32,450 won.
Jeong Jun-seop, an analyst at NH Investment & Securities, said, "Reflecting the implementation of tax-exempt dividends and the rise in shareholder return ratio, we reduced the target price discount rate by 5 percentage points (p) and raised the target to 40,000 won."
Earlier, Woori Financial Group said it will implement tax-exempt dividends for individual shareholders by using 6.3 trillion won as dividend resources starting with fourth-quarter dividends last year. It also said it will raise its common equity tier 1 (CET1) ratio from the previous 12% to 13% in the first half of this year, increase the dividend per share (DPS) by more than 10%, and buy back 300 billion won of treasury shares for cancellation.
Regarding the CET1 ratio, Jeong said, "Barring major variables, it will reach 13% early," adding, "In that case, the shareholder return ratio range presented in the capital policy rises to 40%–50%, and once the capital ratio settles stably in the 13% range, the need to accumulate a large amount of additional capital diminishes, enabling stable asset growth and expanded shareholder returns."
On the DPS increase of more than 10% and this year's 300 billion won share buyback and cancellation, Jeong projected that "the shareholder return ratio will rise from 36.5% to 42.3%, and will reach 50% by 2028."
That day, brokerages one after another raised their target prices for Woori Financial Group. ▲ Samsung Securities 35,000 won ▲ Hanwha Investment & Securities 41,000 won ▲ Kiwoom Securities 42,000 won.