LS Securities on the 28th said NH Investment & Securities' fee income and trading gains both far exceeded expectations, showing a clear improvement in earnings. Accordingly, it raised the target price to 40,000 won from 35,000 won, but kept its investment rating at "Hold," citing valuation pressure.
Earlier, NH Investment & Securities disclosed that it posted 475.7 billion won in net profit in the first quarter of 2026. That is a 68% surge in profit compared with the previous fourth quarter, when it had set a record high.
The earnings improvement was driven by simultaneous increases in fee income and trading gains. Jeon Bae-seung, an analyst at LS Securities, said, "Fee income rose 48% from the previous quarter to surpass 500 billion won, and trading gains also jumped to 182.4 billion won."
In particular, trading gains appear to reflect the effectiveness of its bond management strategy. Even amid rising interest rates, it minimized losses through conservative bond management, and profitability improved as bonds that had previously recognized losses reached maturity and swung to gains, combined with valuation gains on non-marketable assets.
Jeon expects fee income to lead earnings growth from the second quarter. Jeon said, "The pace of increase in trading gains will slow somewhat after the second quarter," but added, "Even so, with expanding valuation gains on investment assets thanks to a bull market and continued growth in transaction value, the overall earnings outlook will be positive."
Expectations are also growing for larger dividends on the back of rising profits. LS Securities expects NH Investment & Securities' payout ratio to exceed 40%, projecting a dividend yield in the mid-5% range.
However, the stock's rise has already increased valuation pressure, which was cited as a burden. Despite raising the target price, LS Securities maintained its "Hold" rating, considering the price-to-book ratio (PBR) of about 1.25 times.