3Q22 Forecast: Consolidated NP at KRW136.6bn (-46.2% QoQ)
The author is an analyst of KB Securities. He can be reached at cygun101@kbfg.com. -- Ed.
Maintain HOLD; revise target price down 12.0% to KRW6,600
We revise our TP on Mirae Asset Securities down 12.0% to KRW6,600. Our TP reflects KRW18,607 12m fwd BVPS and 0.35x target P/B (sustainable ROE: 6.0%→5.9%; COE: 10.0%→10.6%; g: 3.3%):
(1) We lowered 2022E/2023E daily avg. trading value by 8.6%/10.1% to KRW16.2tn/KRW15.0tn.
(2) Sustainable ROE was reduced to reflect a softer IB earnings outlook.
We maintain HOLD given that we expect valuation G/L on investment assets to become increasingly volatile (i.e., properties, pre-IPO stocks) and overseas subsidiaries should see their earnings continue to fluctuate. We cut 2022E/2023E NP attributable to controlling interests by 11.1%/9.8% to KRW753.5bn (ROE 7.1%)/KRW794.9bn (ROE 7.2%).
3Q22 forecast: Consolidated NP (to control.int.) at KRW136.6bn, below market consensus by 26.1%
We forecast consolidated NP attributable to controlling interests at KRW136.6bn (-46.2% QoQ), which is 26.1% below the market consensus. Yet, standalone NP should decline only 8.8% QoQ. We attribute consolidated NP’s larger decrease to: (1) approx. KRW100.0bn in valuation gains from non-marketable securities booked as 2Q22 consolidated NP (i.e., KRW239.5bn diff. btw. consolidated and standalone securities valuation gains) and (2) lower earnings contribution from non-marketable assets in 3Q22 amid falling global asset prices. Brokerage income should decline 6.6% QoQ on lower transaction values/margin loan balance while IB income should remain flat QoQ. However, standalone trading income should retreat 23.0% QoQ on higher interest rates and a slumping stock market.