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[Apha Biz=(Chicago) Reporter Paul Lee] Korea Investment & Securities Co. on the 12th sharply lowered its expectations for a rise in stock prices of rival Mirae Asset Securities Co. It predicted that losses in overseas commercial real estate investment, including office buildings, and a drop in operating gains and losses will undermine Mirae Asset Securities' profitability.
Korea Investment Corporation lowered the target price of Mirae Asset Securities by 11% from 9,500 won to 8,500 won in the report. The target price of Mirae Asset Securities presented by Korea Investment Corp. was calculated by lowering the return on equity (ROE) from 6.5% to 6% and applying 0.4 times the target return on equity (PBR) to the net asset per share (BPS) in the second quarter.
The reason why Mirae Asset Securities of Korea Investment & Securities lowered its target price is because it expected its third-quarter earnings to be far below market expectations. Mirae Asset Securities' net profit in the third quarter, estimated by Korea Investment Corp., was KRW 101.6 billion, 32% lower than the market consensus (average forecast) of KRW 149 billion.
Korea Investment & Securities Mirae Asset Securities' third-quarter earnings outlook was low because it expected the loss of the valuation of various investment assets such as overseas real estate and CJ CGV convertible bonds to continue.
AlphaBIZ 폴 리(hoondork1977@alphabiz.co.kr)
