The average target price of 085620.KS is 5875 and suggests 10% upside potential. Usually, this means a HOLD recommendation among investment firms. This neutral recommendation suggests no significant price movement, up or down, in the next 12 months. The most optimistic analyst has a target price of 6500.0. This translates into 21% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 5100.0. This is equivalent to 5% downside potential in the worst case. 

Mirae Asset Life Insurance Co., Ltd. provides life insurance, personal insurance, reinsurance contracts, and retirement products in South Korea. As of December 31, 2019, it operated 41 branches and 104 agencies. The company was founded in 1988 and is headquartered in Seoul, South Korea.

Korea

Mirae Asset Life Insurance Co., Ltd.

Financial Services

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. On average, the company pays dividends annually. 

085620.KS reported revenue of KRW 2 427 797mn in the last 12 months, down 41% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 17% from FY23 to KRW 1 046.73. Market expects EPS to reach KRW 468.00 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 1ppts over six months and grown 3ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 6.3% in the last 12 months, a decline from 6.4% in FY23. 

Historically, 085620.KS has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 5.6%, a growth from 2.9% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 0.4% in the last 12 months, an increase from 0.3% in FY23. The market analysts predict that RoA will be 0.1% in FY24, again weaker than its peers. 

Mirae Asset Life Insurance Co., Ltd. reported a return on equity (RoE) of 5.0% in the last 12 months, down from 5.5% in FY23. The market consensus projects an RoE of 1.2% in FY24, again behind its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to 0.7%, below the peers. The consensus estimate for FY24 for RoCE is 0.9%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.0 in the past several years. This ratio implies a average shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

085620.KS has very poor trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity is unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to slow historical revenue growth, bleak profitability, negligible return on capital, poor working capital management, and poor cash flow generation. We note low margin volatility and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, 085620.KS is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, 085620.KS is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. We would also like to highlight the negligible intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is considerably underpriced compared to similar stocks. In particular, the stock is underpriced on P/E, 'cheap' on EV/EBITD. 

Mirae Asset Life Insurance Co., Ltd.

₩ 5350

4

Mirae Asset Life Insurance Co., Ltd.

₩ 5350

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

₩ 5350

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