Korea Investment & Securities projected on the 15th that Hanwha Life's expected net profit for the second quarter will fall short of market expectations (consensus). However, it anticipates that the risk of further stock price decline is low since the recent stock price is already undervalued. No target stock price was suggested, and the investment opinion remains 'neutral.'
Hanwha Life's second quarter net profit is expected to be 1.301 trillion won, which is 32.4% lower than the consensus. This is a result of the widening deficit in the difference between the expected loss ratio and the actual loss ratio (experience deviation), leading to a 21% drop in insurance profit estimates.
Insurance profit is expected to decrease by 28.3% year-on-year to 131.7 billion won. This is because increased insurance payouts have led to a deficit of 31 billion won in insurance payout experience deviations. However, business expense experience deviations are expected to result in a loss of 9.5 billion won, which is an increase of 12.9 billion won compared to the same period last year.
Hanwha Life's recent stock price has been on the rise. However, it is analyzed that the rebound is responding to external factors, such as the gradual alleviation of burdens related to capital regulations, resulting in a slight easing of the discount rate, rather than performance.
Hong Ye-ran, a researcher at Korea Investment & Securities, noted, 'Even with the recent rise in stock prices, the trailing PBR is still only 0.3 times, so the risk of decline is limited,' adding, 'To reassess value, it is necessary to specify improvements to the refund reserve system for policy cancellations.'