Daishin Securities announced on September 3 that it has raised its target price for DB Insurance from 200,000 won to 250,000 won, citing the company's newly announced value-up policy and the acquisition of Fortegra, which are expected to enhance profits and shareholder returns. The investment recommendation remains a 'buy.'
Park Hye-jin, a researcher at Daishin Securities, stated, "With the acquisition of Fortegra and the newly announced value-up policy, the total return amount for the company is expected to increase. Even with conservative assumptions, the total dividend is projected to rise to 90 billion won in 2027 and 100 billion won in 2028."
DB Insurance announced its value-up policy 2.0 following the completion of the Fortegra acquisition. The plan aims to increase the return rate from 35% on a standalone basis by 2028 to 40% on a consolidated basis and 50% on a standalone basis by 2030. The company also plans to raise its dividend per share (DPS) by more than 10% annually.
Park noted, "By the end of 2025, the standalone dividend payout ratio is expected to be 29.7%, meaning the return rate will increase by 4% each year until 2030. This represents an annual increase of about 2-3% compared to previous estimates."
He also assessed that there is sufficient capacity for dividends. DB Insurance has set its dividend range using the K-ICS ratio and the dividend coverage ratio (DCR), which divides the available profit by the expected dividend. As of the end of June this year, the available dividend resources amount to 2.6 trillion won, and applying Daishin Securities' estimated dividend of 600 billion won for this year results in a DCR of 433%. This exceeds the appropriate range of 200-400%, indicating that additional dividends are possible.
Park added, "The company plans to maintain sustainable balanced growth by avoiding excessive competition for new contracts to increase available dividend resources, and the strategy of not expanding new contract competition by more than 20% compared to current levels is also positive." He further noted, "The increase in retention rates has also positively reduced the regular CSM adjustment amount to the 100 billion won range."
* This article has been translated by AI.
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