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Payout ratio to keep trending higher

Maintain Hold; raise TP to W480,000

We raise our target price on Samsung Fire & Marine (Samsung F&M) to W480,000 (from W473,000), which we derived by applying a P/B of 1.0x to our 2026F BPS. Our target multiple reflects expectations for steady dividend payout ratio increases toward the company’s 50% target. That said, with our target price implying slight downside (-4%), we maintain our Hold rating.

3Q25 results meet consensus

For 3Q25, net profit attributable to owners of the parent came in at W538bn, in line with the consensus (W524.5bn). Both underwriting and investment profits fell QoQ. Underwriting profit declined due to adverse experience variance and worsening auto loss ratios, while investment profit fell due to the absence of asset disposal gains recorded in the previous quarter. CSM rose 3% QoQ, marking a stronger-than-usual pace of growth, driven by higher new business CSM and an increase in the new business CSM multiple. CSM adjustments were also smaller than usual. That said, we expect the company to record large-scale CSM adjustments in 4Q25 due to accumulated adverse experience variance.

2026 outlook

In 2026, we forecast net profit attributable to owners of the parent to inch up 1.7% YoY. While underwriting profit should continue expanding, supported by improvement in experience variance and a higher CSM balance, investment profit is likely to decline due to the absence of asset disposal gains recorded this year. However, even with modest profit growth, we expect the firm to continue raising its cash dividend payout ratio, in line with its corporate value enhancement plan; we project the 2026 common stock payout ratio to reach 41.8% (or 45.1% including preferred shares). That said, we forecast dividend yield at only 4.4%. The total shareholder return yield (including treasury share cancellations) is likely to reach 6.8%.