Mirae Asset Securities, which announced record earnings on August 12, is facing a cautious evaluation from analysts. Despite reporting nearly 3 trillion won in net profit for the first half of the year, several brokerages have lowered their price targets.
According to FnGuide on August 13, among 14 brokerages that issued reports on Mirae Asset Securities from August 12 to that day, 11, excluding NH Investment & Securities, Daol Investment & Securities, and Hana Securities, have reduced their price targets. LS Securities set the lowest target at 40,000 won, while Yuanta Securities proposed a target of 75,000 won.
Mirae Asset Securities recorded a consolidated net profit of 1.9052 trillion won for the second quarter, marking a 369.4% increase year-on-year and a 90.2% increase from the previous quarter. This is the first time in the securities industry that a company has surpassed 1 trillion won in net profit for two consecutive quarters, following 1.01 trillion won in the first quarter. The cumulative net profit for the first half of the year reached 2.9072 trillion won, up 337.8% from the same period last year.
The issue lies in the fact that the key factor driving these results also increases uncertainty for future performance. Mirae Asset Securities earned 1.6242 trillion won from the valuation gains of its investment in SpaceX during the second quarter, which accounted for 64.2% of its pre-tax profit of 2.5287 trillion won. If SpaceX's stock price declines, the valuation gains could turn into losses, leading to greater volatility in earnings.
Indeed, SpaceX's stock price fell below the initial public offering price of $135 from July 16 to August 11. After rising over $200 shortly after its listing on June 12, the stock experienced significant volatility, including a 16.43% drop in a single day on June 22.
KB Securities has adjusted its forecast for Mirae Asset Securities' net profit attributable to shareholders for this year down by 16.4% to 2.9 trillion won. They believe that the volatility of the approximately 5 trillion won value of its SpaceX shares contributes to profit uncertainty. They also noted that a 10% movement in SpaceX's stock price could lead to a pre-tax profit fluctuation of about 500 billion won.
The outlook for the core business in the second half of the year is also challenging. Since July, trading volumes have decreased, and increased market volatility may lead to a slowdown in brokerage revenues. Samsung Securities recently raised its cost of capital from 9.4% to 11.3% and lowered its sustainable return on equity from 12.2% to 11.7% in response to the increased market volatility and adjustments in the domestic stock market.
Jeon Bae-seung, a researcher at LS Securities, stated, "Given the decline in SpaceX's stock price, reduced trading volumes, and increased market volatility, a decrease in profit size in the second half is inevitable." Lim Hee-yeon, a researcher at Shinhan Investment Corp., also noted, "While the results are historic, a significant portion of the net profit comes from valuation gains on investment assets, so it is necessary to distinguish between recurring earnings and one-time factors."
Meanwhile, on that day, Mirae Asset Securities closed at 38,050 won, up 1,550 won (4.25%) from the previous trading day. Following a 2.82% increase the day before its earnings announcement, the stock has shown strength for two consecutive trading days, but it remains at half the 52-week high of 87,800 won recorded on May 6.
* This article has been translated by AI.
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