Shinhan Investment Securities raised the target price for NH Investment & Securities by a significant margin to around 44,000 won on the 24th from its previous level. This action was taken because the company's first quarterly earnings report of the year far exceeded market expectations. As the stock market showed signs of vitality and trading volumes surged among investors, the prospect of improved revenue structures for securities firms was once again highlighted. In particular, considering the potential for future business expansion, the growth potential of the securities firm is still being highly evaluated.
Research Fellow Im Hye-yeon evaluated in the report released today that NH Investment & Securities recorded far more robust first-quarter earnings than anticipated. The securities firm announced through previous disclosure data that its Q1 revenue for this year reached 8.8976 trillion won, an increase of about 88.8% compared to the same period last year. Operating profit was recorded at 63.67 billion won, and net profit for the period was 47.57 billion won, achieving a record-breaking performance on a quarterly basis. These figures suggest not just a boom but a qualitative improvement in the company's revenue-generating capability.
The core driver of this earnings improvement is the increase in trading volume in the stock market. As the market strengthened, trading activities among investors became more active, resulting in a significant increase in commission revenue from entrusted trading acquired by securities firms. NH Investment & Securities maintained its market share at 10.7% and also achieved notable results in the asset management sector. The number of clients with assets over 100 million won increased to 358,000, and the number of high-net-worth individuals with assets over 1 billion won rose to 24,000, causing a 111% surge in asset management fees. Additionally, by shortening the duration for fund recovery even during the interest rate rise, trading and other gains surged by 224% due to reduced profit-and-loss volatility.
On the other hand, corporate finance fee revenue decreased by 9.9%, but this is mainly attributed to the reduction in debt guarantee fees. Looking at the overall trend, although some traditional corporate finance segments stumbled, the strong performance in retail, asset management, and trading sectors more than made up for it. In particular, the Q1 net profit of 47.57 billion won corresponds to 46% of last year's annual net profit of 131.5 billion won, demonstrating that the company's earning resilience has strengthened by achieving nearly half of last year's annual results in just one quarter.
Based on this earnings trend, Shinhan Investment & Securities is also paying close attention to the possibility of entering the comprehensive investment account business. This business model allows securities firms to operate customer funds more broadly, and if the scope of capital utilization expands, there is considerable room to further boost profitability. Research Fellow Im raised the target price by 10% from the previous level, reflecting the upward revision of earnings estimates and adjustment of net assets per share, and maintained a buy rating. However, while it is likely that this trend will continue if market trading volume and asset management demand continue to support it in the near term, it is also necessary to consider that performance fluctuations may occur depending on interest rate changes, market instability, and the pace of recovery in corporate finance.