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Photo = Yonhap news |
[Alpha Biz= Paul Lee] Shinhan Investment Securities raised its target price for Meritz Financial Holdings from 130,000 KRW to 143,000 KRW on Thursday, citing expectations of improved performance and stronger shareholder returns.
Shinhan Investment noted that the reduction of income-bearing securities related to overseas real estate, which had been a burden on Meritz Financial's profits over the past two years, is expected to be largely resolved this year, fueling expectations for earnings growth. The firm also highlighted the lack of reason to sell, given the average daily share repurchases of 5 billion KRW, suggesting strong demand for the stock.
Shinhan Investment projected that the company's price-to-earnings ratio (PER) would be 7.2 times this year, leaving room for growth when considering the target PER of 10 times. The management team expects to achieve consolidated net income of approximately 3 trillion KRW over the next two to three years, and if earnings growth aligns with expectations, there is potential for further target price increases.
Shinhan Investment added, “If the tax reform promoting value-up occurs, there could be a delay in the share buyback schedule, but it has not been finalized yet.”
Earlier, Meritz Financial announced a consolidated net income of 340.2 billion KRW for Q4 of last year, which was in line with the consensus of 336 billion KRW. While the operating profit of its fire insurance business declined by 22% year-on-year, the securities business showed an increase of about 12%.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
