Mirae Asset Securities (006800.KS) posted more than 1 trillion won in quarterly net profit for a second straight quarter, yet analysts have moved to cut their price targets one after another. Despite a solid brokerage business, they warned that swings in the share price of SpaceX could widen the company's earnings volatility. Mirae Asset said it is preparing measures to minimize the impact of SpaceX on its earnings.
Mirae Asset was trading at 38,650 won, up 2,150 won, or 5.89%, from the previous session, according to Nextrade on the 13th. The company said a day earlier that its second-quarter consolidated net profit rose 369% from a year earlier to 1.9052 trillion won. It became the first brokerage to top 1 trillion won in net profit for two consecutive quarters, overtaking even Shinhan Bank, which posted the largest net profit among commercial banks at 1.3014 trillion won.
Despite the strong results, analysts lowered their price targets on Mirae Asset one after another. SK Securities said in a report the same day that it had cut its target price to 42,000 won, 17.6% lower than before. Daishin Securities (44,000 won), Yuanta Securities (75,000 won), Kiwoom Securities (65,000 won), Kyobo Securities (50,000 won) and LS Securities (40,000 won) also lowered their existing targets.
The earnings volatility linked to SpaceX was cited as the reason. Chang Young-im, an analyst at SK Securities, said in the report that "the possibility of large short-term earnings volatility related to SpaceX will weigh on the stock." Chang added that "we estimate that related valuation gains change by about 29 billion won for every $1 move in SpaceX's share price, so the direction of SpaceX's stock going forward will determine the tone of third-quarter results."
Still, the investment rating was kept at "buy." Yoon Yoo-dong, an analyst at NH Investment & Securities, said the company's business structure, which is differentiated from rivals, is a premium factor as it expands its business while accumulating investment assets that reach 14 trillion won.
