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2Q25 results meet our estimates on solid IB fee income

Maintain Hold and TP of W232,000

We maintain our Hold rating and target price of W232,000 on Kiwoom Securities. While 2Q25 net profit met our estimate, the domestic stock market rally―the main earnings driver in the quarter―has lost steam since the start of 3Q25. Consequently, both trading volume and margin loan balances look unlikely to improve sharply from our current estimates. Our view that 1.0x represents a fair P/B level remains unchanged.

2Q25 results meet our estimates

For 2Q25, Kiwoom Securities posted net profit attributable to owners of the parent of W309.7bn, in line with our estimate (W300.7bn) and above the consensus (W264.3bn). Securities net profit came in at W336.9bn, significantly beating our estimate of W266.3bn; this indicates that non-securities subsidiaries continued to report weaker-than-expected results. The outperformance in securities net profit was largely driven by: 1) strong IB fee income; and 2) W60bn in special dividends from a subsidiary, which led to higher-than-expected non-operating income. Brokerage fee income and interest income were in line with estimates, while trading income fell short.

Shareholder returns likely to focus on cash dividends

As part of its corporate value enhancement plan, the company previously pledged to conduct buybacks/cancellations until its P/B reached 1x. With the stock now trading near that level, we do not expect any further announcements regarding additional buybacks. With the government currently considering separate taxation on dividend income, there is a possibility that the company may slightly raise its minimum shareholder return ratio (currently 30% of standalone net profit); however, any such move is unlikely until after the new policy is finalized.