Shinhan Investment Corp. announced on September 2 that it has raised its target price for Hana Financial Group from 150,000 won to 160,000 won, citing expectations for continued solid earnings in the second half of the year, improved capital ratios due to declining exchange rates, and an increase in shareholder returns. The firm maintained its 'buy' rating and recommended Hana as its top pick in the banking sector.
Research analyst Eun Kyung-wan stated, "Hana Financial Group's net income attributable to shareholders for the third quarter is expected to reach 1.3 trillion won, a 14.9% increase compared to the same period last year, exceeding consensus estimates by 5.3%. Given the consecutive interest rate hikes in July and August, the trend of improving net interest margins remains valid."
He added, "We expect that won-denominated loans will increase by over 1% due to balanced growth in household and corporate lending, and the won-dollar exchange rate is projected to drop by more than 160 won, resulting in approximately 150 billion won in foreign exchange gains."
Eun also positively assessed the expansion of capital and shareholder returns, noting, "Due to strong performance and the effects of the declining exchange rate, the common equity tier 1 capital ratio is expected to rise above 13.5%. Based on this increased capital strength, we anticipate an announcement of an additional 300 billion won in share buybacks and cancellations in the fourth quarter."
He further stated, "Including this, the total shareholder return for the year is projected to reach 2.23 trillion won, achieving a total shareholder return rate of 51.0%."
Eun concluded, "While the annual profit and loss estimates have not changed significantly, we have adjusted the target price upward to reflect the change in valuation timing and the increase in shareholder return rates. Compared to competing banks, Hana has a high level of earnings reliability in the second half due to limited exposure related to government bond collusion and the relatively low contribution of profits from its securities affiliates."
* This article has been translated by AI.
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