Alphabiz - Brokerages See Target Price Upgrades on Record Earnings Outlook, Mirae Asset Faces Cautious View

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[Alpha Biz= Paul Lee] Major South Korean securities firms are seeing a wave of target price upgrades on expectations of record first-quarter earnings, driven by strong equity markets, rising trading volumes, and expanding investment banking (IB) revenues.

According to industry sources on April 26, firms including Mirae Asset Securities, Korea Investment Holdings, NH Investment & Securities, Kiwoom Securities, and Samsung Securities are expected to deliver near-record results for the quarter.

However, sentiment toward Mirae Asset Securities remains cautious. All 10 brokerages that issued reports since April have maintained a “neutral” rating, citing concerns over short-term valuation pressure following a sharp share price rally.

Consensus estimates from FnGuide project Mirae Asset Securities’ net profit to surge nearly 300% year-on-year to KRW 1.03 trillion, partly driven by valuation gains from its stake in SpaceX.

Analysts note that while the firm has been aggressive in pursuing new business areas, its return on equity (ROE) has consistently trailed peers, raising concerns over sustainability.

Meanwhile, Korea Investment Holdings is expected to post record earnings, with first-quarter net profit projected to rise 34.9% year-on-year to KRW 619.6 billion.

Despite improving shareholder returns, including higher dividend payouts, Mirae Asset Securities continues to trade at a relatively high price-to-book ratio, prompting analysts to maintain a cautious stance.

In contrast, Korea Investment Holdings is viewed more positively, with analysts highlighting its active use of leverage and strong earnings capacity within the sector.

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)