Mirae Asset Securities said on the 27th that for Woori Financial Group(316140), the effective shareholder return rate will exceed 50% in the second half on the back of share repurchases and cancellations and the effect of tax-exempt dividends. It maintained a "buy" (BUY) recommendation and a target price of 43,000 won. The previous trading day's closing price was 30,850 won.
Jeong Tae-joon, an analyst at Mirae Asset Securities, said, "Woori Financial Group, along with this earnings announcement, revealed a plan to repurchase and cancel its own shares worth 150 billion won in the second half," and "the shareholder return rate this year is expected to rise to 46.4%, and considering that the dividends currently being paid are entirely tax-exempt dividends, the effective shareholder return rate will exceed 50%."
Woori Financial Group's second-quarter net income attributable to controlling shareholders came in at 1.0046 trillion won, beating both the firm's estimate (923.1 billion won) and the market consensus (932.2 billion won).
Jeong noted, "Pre-tax profit was in line with estimates, but net profit came in higher than expected due to a sharp decline in corporate tax expense," adding, "interest income, non-interest income, and credit costs were all in line with expectations, and a significant improvement in the credit cost ratio is a positive."
Woori Financial Group's board approved a share exchange agreement to make Tongyang Life Insurance a wholly owned subsidiary. The exchange ratio is 0.2521056 share of Tongyang Life Insurance for each 1 share of Woori Financial Group, and the size of the new share issuance (8,696,875 shares) is 1.19% of the existing shares outstanding. The share exchange date is Aug. 11, and the listing date of the new shares is Aug. 31.