Securities firms have successively downgraded their investment opinions on Mirae Asset Securities to 'neutral.' While the outlook for the securities industry is positive, they determined that the stock price of Mirae Asset Securities has surged more than 170% this year alone, limiting further upside.
On the 11th, Samsung Securities and Hyundai Motor Securities lowered their investment opinions on Mirae Asset Securities from buy to 'neutral' and 'market perform' (6-month return ±15%), respectively. Earlier, Korea Investment & Securities, SK Securities, and KB Securities also revised their investment opinions on Mirae Asset to neutral.
However, analysts who provided a neutral investment opinion did not express concerns about the profitability of Mirae Asset Securities. According to financial information provider FnGuide, the securities firms forecast that Mirae Asset Securities will record an operating revenue of 3.128 trillion won and a net profit for controlling shareholders of 1.3158 trillion won this year on a consolidated basis. Both operating revenue and net profit are expected to exceed last year’s figures by 10%. Compared to the forecast made three months ago, it is also about 10% higher.
The researchers who presented a neutral investment opinion explained that the current stock price of Mirae Asset Securities is a result of various expectations reflected beyond the company's valuation.
Jung Min-ki, an analyst at Samsung Securities, stated, 'The stock price of Mirae Asset Securities rose due to the possibility of share buybacks amounting to 23% of the number of issued shares, as well as the parent company, Mirae Asset Consulting, registering a stable coin trademark, which generated expectations related to blockchain.' He added, 'It's too early to quantify this possibility in profit forecasts or target price calculations.'
Jang Young-im, an analyst at Hyundai Motor Securities, indicated that while Mirae Asset Securities is receiving a high valuation with a price-to-book ratio (PBR) of 1, the return on equity (ROE) is expected to be 8.5%, which is lower than that of competitors.
The analyst noted, 'Aside from fundamentals, there are currently no visible governance restructuring actions that could elevate the multiple for Mirae Asset Securities, so the potential for further price increases at this point is limited to just expectations.'
Mirae Asset Securities shares were traded at 22,250 won at 1:30 p.m. on that day in the KOSPI market. The difference with the average target price of 22,570 won adjusted by seven securities firms over the past month is 1.4% (320 won).
There are also opinions suggesting that there is still potential for an increase. Previously, NH Investment & Securities and Kiwoom Securities set the target price for Mirae Asset Securities at 28,000 won.
Yoon Yoo-dong, an analyst at NH Investment & Securities, viewed the handling of treasury stock as crucial. Among the 130 million shares held by Mirae Asset Securities, if 110 million shares are burned as merged treasury stock, it will lead to a decrease in capital, thus requiring a special resolution at the shareholders' meeting.
Yoon noted, 'Mirae Asset Securities has actively pursued enhancing shareholder value among large securities firms, so I view the possibility of share buybacks positively.' He stated, 'New treasury stock purchases and buybacks will support the lower price level of the stock.'