NH Investment & Securities announced on July 1 that it has raised the target stock price for Samsung Fire & Marine Insurance from 740,000 won to 910,000 won, reflecting the increased value of its stake in Samsung Electronics. The investment recommendation remains a 'buy.'
Jung Jun-seop, a researcher at NH Investment & Securities, explained that the valuation method for Samsung Fire & Marine Insurance has been changed to a sum-of-the-parts (SOTP) approach, combining the value of its insurance business with the value of its 1.5% stake in Samsung Electronics. The stake represents approximately 37.7% of the company's overall value, and the expected dividend yield for this year is around 3.6%, enhancing its investment appeal.
NH Investment & Securities forecasts that Samsung Fire & Marine Insurance's consolidated net profit for the second quarter will exceed market expectations, rising 11.9% year-on-year to 713.6 billion won. This is attributed to improved profitability in general and auto insurance, as well as strong performance from Canopius and a favorable stock market contributing to better investment income.
Jung noted, "With the implementation of management benefits for treatments such as physical therapy and extracorporeal shockwave therapy starting in July, we expect a significant reduction in insurance payouts, potentially amounting to hundreds of billions of won annually, if the balloon effect is minimal. The combination of solid performance, dividends, and the rising value of the Samsung Electronics stake will enhance investment attractiveness."
* This article has been translated by AI.
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