[Edaily Reporter Park Soon-yeop] Shinhan Investment Securities maintained its “top pick” rating for #Kiwoom Securities, noting that the company is simultaneously achieving record-breaking earnings and equity growth this year. Although the stock price has recently been sluggish due to tightening supply and demand and concerns over profit declines next year, the firm believes the actual decline in profits will be limited and that valuation pressures are not significant.
In a report released on the 5th, Lim Hee-yeon, an analyst at Shinhan Investment Securities, maintained a “Buy” rating and a target price of 600,000 won for Kiwoom Securities. Based on the closing price of 372,000 won on the 4th, the report indicated an upside potential of 61.3%.
Researcher Lim stated, “Even amid an unprecedented business environment marked by record-breaking earnings and rapid growth in equity this year, the expected price-to-earnings ratio (PER) for 2027 is only 5.7 times, and the price-to-book ratio (PBR) is just 1.03 times,” adding, “We judge this to be an excessively undervalued range.”

Shinhan Investment Securities estimated Kiwoom Securities’ net income attributable to controlling shareholders for this year at 1.7104 trillion won. This represents a 53.6% increase from last year. The firm projected net operating revenue to reach 3.3442 trillion won, up 39.6%, and operating profit to reach 2.1971 trillion won, up 47.6%. Next year’s net income attributable to controlling shareholders is expected to be 1.6846 trillion won, a mere 1.5% decrease from this year.
The recent slump in Kiwoom Securities’ stock price is attributed to concerns over a decline in brokerage market share and a slowdown in credit extension market share. However, Researcher Lim analyzed that this is difficult to view as a deterioration in fundamentals. He explained that the decline in market share of trading volume is largely due to the inclusion of exchange-traded fund (ETF) trading volume in the denominator, and considering that ETF trading commissions are free within retirement pension accounts, it is difficult to view this as an indicator directly linked to actual profitability.
The rapid growth in overall market trading volume was also cited as a factor supporting earnings. This is because even if market share declines slightly, brokerage revenue can be maintained or even increase if the growth rate of total trading volume is faster. In fact, Analyst Lim estimated that Kiwoom Securities’ commission revenue for this year would reach 1.6827 trillion won, an 88.9% increase year-over-year.
The credit extension segment is also assessed to be performing better than expected. The judgment is that, starting from the second quarter of this year, profits are flowing entirely into equity capital, marking the beginning of a phase where credit extension limits are expanding. Since a securities firm’s capacity for credit extension is determined by the size of its equity capital, if substantial profits accumulate this year, the foundation for future interest income could also grow.
Researcher Lim viewed the core of Kiwoom Securities’ investment appeal as lying not in a short-term profit cycle but in capital accumulation. Assuming standalone net profit of approximately 1.65 trillion won this year and a shareholder return rate of 30%, equity is expected to increase by about 19% by year-end. The increased capital leads to expanded leverage resources and higher credit extension limits, creating a structure that in turn boosts underlying earnings capacity.
He explained, “The key is not this year’s profit cycle, but the compounding growth of underlying earnings capacity through capital accumulation,” adding, “It is the compounding of capital—not short-term earnings per share (EPS)—that serves as a mechanism to boost earnings capacity and alleviate valuation pressures.”
The criteria for calculating the target price have been adjusted conservatively. Shinhan Investment Securities previously calculated the target price based on the projected return on equity (ROE) and book value per share (BPS) for 2026, but this time, it has shifted to using 2027 ROE and BPS. This move reflects concerns about profit declines across the sector following the record-breaking stock market boom of 2026.
Nevertheless, the firm believes the fair value remains sufficient. Shinhan Investment Securities stated that when reflecting an expected 2027 ROE of 18% and a cost of equity of 8.1%, the fair PBR is calculated at 2.2x. Even when applying a 20% discount to account for increased stock market volatility and the possibility of a prolonged decline in market share, the target PBR is calculated at 1.8x. Applying this to the 2027 projected BPS of 362,197 won, the firm maintained its target price of 600,000 won.
Shareholder returns are also cited as an investment attraction. Shinhan Investment Securities projected Kiwoom Securities’ dividend yield at 4.7% for both this year and next year. Kiwoom Securities has previously announced that it will maintain a shareholder return ratio of over 30% based on standalone net income through 2025 and will cancel its existing treasury shares by 2026.
Analyst Lim stated, “In addition to structural improvements in financial health, the company offers a dividend yield of 4.7%.” He added, “The recent slump in the stock price is the result of a combination of shrinking supply and demand and concerns over a profit decline in 2027; however, the estimated scale of the profit decline is at a level where profit levels can effectively be maintained.”