iM Securities analyst Seol Yong-jin projected on the 6th that Kiwoom Securities' net profit this year will reach 506.1 billion won, a 63.4% increase compared to the previous year, exceeding market consensus. The analyst lowered the target price from 550,000 won to 480,000 won due to ongoing market share decline concerns. Average daily trading volume on Korean exchanges is approaching 140 trillion won driven by leveraged ETF launches, supporting overall earnings growth for the retail brokerage leader. However, Kiwoom's trading volume market share continues to decline due to external factors including weak KOSDAQ performance, margin loan limit exhaustion, and competitors' direct market access (DMA) advantages in leveraged ETF trading. The analyst maintained a 'buy' rating while emphasizing that stock price recovery requires resolving market share concerns first.
iM Securities Projects 506.1 Billion Won Net Profit for Kiwoom Securities
iM Securities Research Center projected Kiwoom Securities' net profit this year at 506.1 billion won on a consolidated basis, representing a 63.4% year-over-year increase and surpassing market consensus. On a standalone basis, the projection stands at 466.7 billion won, up 38.5% from the previous year.
Analyst Seol Yong-jin stated that average daily trading volume (based on Korea Exchange + Nexttrade + ETF) is approaching approximately 140 trillion won due to leveraged ETF launches, indicating the overall earnings growth trend will continue. The analyst noted that while trading volume market share continues its downward trend, this stems from external factors rather than customer attrition, suggesting the robust profit momentum itself is likely to persist.
Seol highlighted that Kiwoom Securities, as the number one retail market share holder in Korea, is expected to generate solid brokerage-centered profits during periods of expanded domestic stock market trading volumes. The analyst added that the company faces relatively less burden from recent interest rate increases due to its comparatively smaller bond book.
Market Share Decline Driven by KOSDAQ Weakness and DMA Competition
Kiwoom Securities' trading volume market share continues to decline due to multiple factors. The weak KOSDAQ market performance, margin loan limit exhaustion, and relatively weak retirement pension business contribute to the ongoing reduction in market share.
Since the launch of leveraged ETFs, competitors' trading volume market share has increased through utilization of direct market access (DMA) systems, raising persistent concerns about Kiwoom's market share contraction. Analyst Seol stated that while concerns about profit strength are expected to be limited, the stock price adjustment will only ease once market share concerns are addressed first.
Target Price Lowered to 480,000 Won Despite Valuation Appeal
Analyst Seol lowered the target price from 550,000 won to 480,000 won, taking into account market share decline concerns. The 'buy' investment opinion was maintained.
The analyst pointed out that this year's projected return on equity (ROE) of 24.6% represents a top-tier level within the sector, while continuous stock price adjustments have brought the price-to-book ratio (PBR) down to only 1.1x, making the valuation attractiveness significantly higher compared to the past.
FAQ
Why did iM Securities project such strong profit growth for Kiwoom Securities despite market share concerns?
Average daily trading volume on Korean exchanges is approaching 140 trillion won due to leveraged ETF launches. As the number one retail market share holder in Korea, Kiwoom Securities is positioned to generate solid brokerage-centered profits during expanded trading volume periods. The analyst noted the company also faces less burden from recent interest rate increases due to its smaller bond book.
What factors are causing Kiwoom Securities' market share to decline?
The market share decline stems from weak KOSDAQ market performance, margin loan limit exhaustion, and relatively weak retirement pension business. Since leveraged ETF launches, competitors have increased their trading volume market share through direct market access (DMA) systems, contributing to Kiwoom's market share contraction.
Why did the analyst lower the target price while maintaining a buy rating?
The target price was reduced from 550,000 won to 480,000 won to reflect ongoing market share decline concerns. However, the buy rating was maintained because the projected ROE of 24.6% represents a top-tier level within the sector, while the PBR of only 1.1x makes the valuation attractiveness significantly higher compared to the past.
