"Enjoy Both Samsung Electronics Premium and Dividend Income" Target Price Raised to 910,000 Won [Click e-Stock]

NH Raises Samsung Fire & Marine Insurance Target Price to 910,000 Won
"Significant Increase in Value of Samsung Electronics Stake"

On July 2, NH Investment & Securities raised its target price for Samsung Fire & Marine Insurance from 7.4 million won to 9.1 million won, while maintaining its 'Buy' recommendation.

Jung Joonseop, a researcher at NH Investment & Securities, stated, "As the value of Samsung Fire & Marine Insurance's 1.5% stake in Samsung Electronics has increased significantly compared to the past, we have changed our target price calculation method to sum the value of the insurance business and the value of the Samsung Electronics stake separately." He explained, "The insurance business is valued at 24 trillion won, the Samsung Electronics stake at 14.5 trillion won, and the total corporate value at 38.5 trillion won, resulting in a per-share target price of 910,000 won."

As for the reason behind maintaining the Buy recommendation, Jung said, "The value of the Samsung Electronics stake accounts for a significant proportion of the corporate value, and the expected dividend yield is not low, at 3.6% for this year and in the 4% range for next year." He added, "This is an insurance stock that allows investors to enjoy both the Samsung Electronics premium and dividend income."

He projected that Samsung Fire & Marine Insurance's performance for the second quarter of this year would exceed market expectations. He estimated the second-quarter controlling net profit at 713.6 billion won, up 11.9% year-on-year.

For insurance profit and loss, he predicted 592.8 billion won, representing 23.4% growth over the same period. Jung commented, "Long-term insurance is expected to see a reduced negative spread, and both general and auto insurance are anticipated to improve compared to the previous quarter and the same period last year." He added, "While the loss ratio and expense ratio guidelines will be applied excluding simple insurance, the offsetting effects across different segments mean the overall impact is expected to be limited."

Investment profit and loss is expected to rise by 8.6% to 385.1 billion won. Jung noted, "This is due to strong performance and increased earnings contribution from Canopius, thanks to a greater stake, as well as positive effects from favorable stock market conditions."

Regarding the implementation of managed benefits for certain treatments such as manual therapy and extracorporeal shockwave therapy, which takes effect this month, Jung viewed it as positive in the long term. The managed benefits system incorporates non-reimbursable medical procedures that are medically necessary but require usage control into the national health insurance benefit framework, while applying a high co-payment rate. He analyzed, "Although it is difficult to predict the effects at this stage, if the balloon effect is not significant, the system could result in a reduction of insurance payouts by several tens of billions of won annually."

This content was produced with the assistance of AI translation services.