Yuanta Securities Korea said on the 6th that Kiwoom Securities, with a high share of brokerage (commission trading) in net operating income, is expected to be the biggest beneficiary if war fears ease and the market rises. It kept a target price of 5.5 million won and a "buy" rating. The previous trading day's closing price of Kiwoom Securities was 4.12 million won.
Kiwoom Securities' first-quarter controlling interest net profit is expected to be 391.4 billion won, 2.4% above market expectations. This is due to solid brokerage profit and loss from increased transaction value.
Woo Do-hyeong, an analyst at Yuanta Securities Korea, said, "Brokerage commissions are expected to rise 27.2% from the previous quarter as market transaction value increases, but with a KOSPI-led market, market share of transaction value is decreasing." Brokerage interest income is also projected to grow 16.2% quarter over quarter on higher margin financing and customer deposit balances.
Trading and product profit and loss are expected to fall 17.3% from last year. Woo said, "With bond yields rising in March and a sluggish stock market, there are concerns about bond valuation losses and principal investment (PI), but concerns are limited because the share of brokerage profit and loss is higher than competitors." The balance of issuance bills approved in November last year stands at about 1.1 trillion won, and funding of 4 trillion won is expected to be possible this year.
Kiwoom Securities paid a dividend per share (DPS) of 11,500 won last year, with a consolidated payout ratio of 26.7%, and the total dividend amount rose 44.8% from a year earlier, meeting the requirements for separate taxation of dividend income. This year's expected DPS is 15,700 won, with a dividend yield of about 3.8%.
Woo said, "To qualify for separate taxation of dividend income through 2027, the dividend payout ratio is estimated at 25% or more, and the total dividend amount will increase 10% year over year," adding, "Due to the higher price-to-book ratio (PBR), there will be no share repurchases or cancellations; the standalone dividend payout ratios for this year and next year will be 30.1% and 33.3%, respectively."