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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] On September 2, Mirae Asset Securities upgraded its target price for Samsung Securities, reflecting strong anticipated momentum for the stock towards the end of the year. The investment firm maintained its "Buy" rating and increased the target price from 55,000 won to 60,000 won, indicating a 27% upside potential from the current price of 47,250 won.
Mirae Asset Securities explained that the target price adjustment is due to an increase in the expected return on equity (ROE) from 11.5% to 11.9% and a reduction in the discount rate from 17% to 16%. The firm also reiterated its preference for Samsung Securities as its top pick in the securities sector.
The firm noted that the upward revision of ROE is attributed to the rapid decline in interest rates up to August and a rebound in the H-index, which is expected to result in Samsung Securities being the only firm in the industry to see an increase in operating profits compared to the previous quarter.
Mirae Asset Securities highlighted that Samsung Securities will benefit fully from lower interest rates due to its lack of exposure to project financing (PF) provisions, non-marketable asset valuation gains or losses, and sensitive proprietary investments (PI) that are typical for its competitors.
Additionally, the reduction in the discount rate reflects Mirae Asset Securities' expectation of a 7.8% dividend yield for Samsung Securities in the fourth quarter, which is significantly higher than its competitors and other financial sectors. This high dividend yield is expected to attract funds into dividend-focused investment funds, particularly towards the year-end.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
