Hyundai Marine & Fire (001450.KS): Strongest monthly results among Korea's top three
- Investment income rose 11.8% YoY on steady growth in AUM (+9.4% YoY) and stable investment yield
(+0.1%p YoY). We believe investment income will rise further as AUG should continue to grow in 2H17.
- The expense ratio climbed 1.9%p YoY in August, due to: 1) a depreciation of new businesses stemming
from a sharp increase in protection-type new businesses (+13.8%p YoY); 2) higher sales expenses
caused by intensifying competition in the GA channel; and 3) a marketing cost rise on efforts to expand
the auto insurance market share. We find the insurer’s top- and bottom-line growth impressive as
evidenced by the ongoing expansion of its auto insurance market share and new business growth which
is stronger than others.
- We expect earnings momentum to stay intact in 2H on the back of improving loss ratios led by the longterm
loss ratio and steadily increasing AUM. We maintain BUY and our target price of KRW53,000.
Hyundai Marine & Fire Insurance is engaged in non-life insurance businesses including fire, marine, flight, casualty, long-term insurance and automobiles.
Hyundai Motor Investment & Securities is the investment banking arm of the Hyundai Motor Group. The company offers stock brokerage and advisory services; derivative products brokerage and advisory services; wrap account portfolio management services; and VIP wealth management and tax planning, institutional equities, derivatives, and futures brokerage services, as well as sells investment and institutional products. It also provides equity offering, ABS, real estate PF and real estate PF securitization, offshore SOC, structured financing, asset securitization, real estate sales, IPO advisory, and private equity fund and fund management services; and CMA/RP portfolio management and fixed income based investments, as well as involved in the issuance, management, and brokerage of OTC derivatives. In addition, the company offers research services, including macro economic forecasts and stock market outlook, industry overviews and forecasts, fixed income strategies, corporate credit analysis, and valuation analysis. Further, it offers a range of retirement and pension services for individuals and corporate members; portfolios and asset allocation consulting and marketing services; proposing retirement pension plans; contract and payment management services; pension plan advisory and actuarial services; and system development and implementation services, as well as operates call centers for retirement pension services, etc.
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