[Click e-Stock] "Kiwoom Securities: Disappointing Market Share... Target Price Lowered"

On July 14, DB Financial Investment lowered its target price for Kiwoom Securities from 5.6 million won to 5 million won, stating that the company is expected to continue losing market share (M/S) despite strong earnings.

Nam Minwook, an analyst at DB Financial Investment, explained in a report released on this day, "The reason for lowering the target price for Kiwoom Securities is an adjustment in the discount rate, reflecting ongoing concerns about a decline in retail M/S." He maintained a 'Buy' investment opinion. Although the new target price of 5 million won is lower than before, it still suggests more than 50% upside from the current share price. The previous day, Kiwoom Securities closed at 323,500 won.

Kiwoom Securities' net profit attributable to controlling interests for the second quarter is estimated to reach 506.6 billion won, up 63.6% year-on-year, in line with market expectations. Analyst Nam projected, "Brokerage commission income is expected to rise 23.2% quarter-on-quarter, driven by increased average daily trading value amid bullish market conditions, and investment banking (IB) commission income is likely to grow 2.9% due to continued refinancing in structured finance."

However, the persistent decline in M/S remains a point of concern. As of May, the average daily contract amount stood at 42 trillion won, but retail M/S has been on a gradual downward trend due to the KOSPI-driven market and increased participation of high-net-worth investors in the stock market.

Nam added, "With the recent share price adjustment, the forward price-to-book ratio (Fwd PBR) is around 1.2 times, making valuation attractive considering this year's expected return on equity (ROE) of 23.7%." He continued, "While improvements in liquidity provider (LP) profit and loss due to increased exchange-traded fund (ETF) trading volume are positive, the market's focus on large-cap stocks, the absence of offline branches, and persistent retail M/S declines due to limited capacity are disappointing. Measures to recover M/S, such as securing additional capacity through capital expansion, are urgently needed."

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