iM Securities reported on May 15 that Samsung Fire & Marine Insurance is maintaining stable profit and loss flows despite a slowdown in the market, raising its target price to 630,000 won. The investment recommendation remains a "buy."
In a report released that day, analyst Seol Yong-jin noted, "Despite the market downturn, the company has shown stable profits, prompting us to adjust our earnings estimates. This includes the impact of rising book value per share (BVPS) due to the increase in the stock price of Samsung Electronics, which we hold."
Samsung Fire & Marine Insurance's standalone net profit for the first quarter of this year rose 4.4% year-on-year to 634.7 billion won, aligning with market consensus. Investment income also increased by 17.5% during the same period, reaching approximately 295.6 billion won.
Seol explained, "A key factor contributing to this growth is the increase in dividend income due to a special dividend from Samsung Electronics, which rose significantly to 50 billion won from about 32 billion won in the same period last year. Additionally, stable investment income has been supported by overall improvements in the investment environment."
He added, "Similar to Samsung Life Insurance, Samsung Fire & Marine Insurance is expected to see one-time gains related to its equity holdings, including asset disposals and special dividends. Investor interest is growing regarding whether these gains will be included in shareholder returns."
Regarding this, he mentioned, "The company has consistently maintained its principle of expanding its dividend payout ratio to 50% by 2028. It plans to separately account for gains from equity disposals and special dividends in its overall dividend resources," predicting a gradual upward trend in the dividend per share (DPS). This year, he forecasts a common stock DPS of 21,500 won, with a dividend yield of 4%.
However, he cautioned that investment risks include low return on equity (ROE) due to rising equity values and concerns related to excess capital.
* This article has been translated by AI.
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