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Record earnings continue

Maintain Hold; raise TP to W180,000

We maintain our Hold rating on Korea Investment Holdings (KIH) and raise our target price to W180,000 (from W145,000). We derived our target price by applying a P/B of 0.8x to our 2026F BPS. We kept our target multiple unchanged, as the company has yet to formally announce a shareholder return policy. With our target price implying only 1.7% upside potential, we maintain our Hold rating.

3Q25 earnings beat expectations

For 3Q25, KIH posted net profit attributable to owners of the parent of W673.9bn, significantly above both our estimate (W412.6bn) and the consensus (W426.6bn). Standalone net profit from the securities unit was W532.1bn, also well above our forecast (W378.4bn). Notable one-off items included: 1) valuation gains stemming from an overseas equity listing; 2) a distribution from an overseas real estate fund; and 3) a reversal of provisions. Excluding these one-off gains, we believe net profit was broadly in line with estimates.

2026 dividend yield estimated at 4.6%

For 2026, we forecast net profit attributable to owners of the parent to increase 1.7% YoY. We expect net fee/commission income to rise 23% YoY, supported by higher trading volumes, and net interest income to expand 6.2% YoY, driven by an increased margin loan balance. However, we expect trading and other income to fall sharply YoY due to the absence of one-off gains and rising market interest rates.

The company has consistently paid out approximately 20% of net profit as cash dividends each year, and with no formal shareholder return policy in place, we assume that this practice will continue. For 2026, we estimate the payout ratio at 20.2%, translating to a dividend yield of 4.6%.