Korea Investment Holdings’ stock is on the up

Korea Investment Holdings released its Q1 25 results on May 15, 2025, posting impressive consolidated performance. The stock, which has already been on an upward trend since April 2025, gained further momentum following the announcement of its Q1 results and has risen by 28% to date.

Net operating revenue jumped 82.1% q/q and 23.5% y/y to KRW975.2bn, driven by fee and commission income and interest income. Operating income surged 38.8% y/y to KRW529.6bn. As a result, net income rose 34% to KRW459.3bn. In addition, annualized ROE increased to 18.6% in Q1 25 from 16% in Q1 24.

Korea Investment Holdings Co., Ltd., established in 2003, is a non-bank financial holding company in Korea that has diversified business lines including securities, asset management, savings bank, credit finance, venture capital, PEF, and real estate trusts. The company offers various products and services through its financial subsidiaries, including products like domestic funds, foreign funds, derivatives linked securities, bonds and retirement pensions. The group’s major subsidiaries include Korea Investment & Securities Co Ltd, Korea Investment Partners Co Ltd, Korea Investment Savings Bank, Korea Investment Capital Co., Ltd., Korea Investment Private Equity, amongst others.

Key subsidiaries driving performance

The group 's Q1 25 consolidated results were driven by KI Securities, which reported a separate net income of KRW420.7bn, reflecting a robust 48.6% increase driven by performance in Investment Banking and Trading. In addition, KI Savings Bank reported an y/y increase of KRW14.3bn in net income to KRW23.3bn, supported by lower funding costs owing to stabilized deposit interest rates.

However, its bottom-line has been impacted by a 9.1% decrease in net income for KI Capital, due to higher provisions. Furthermore, KI Partners reported a net loss of KRW3.3bn, owing to valuation losses on listed equity holdings. KI Private Equity also posted a net loss of KRW0.9bn, owing to losses on existing investments.

Rise in assets and AUM

Korea Investment Holdings reported a steady rise in group assets to KRW111.9tn as of end-Q1 25 from KRW82tn as of end-FY 21. KIS made 84% of the total assets, while KIC and KISB made 13%. In addition, group AUM rose from KRW357.8tn to KRW390.1tn over the same period, with KIS accounting for 78% of the total.

Increase in long-term borrowings

Korea Investment Holdings posted a decent net interest income (NII) CAGR of 11.3% over FY 19-24, reaching KRW1,505bn, while non-interest income rose at a CAGR of 12.2% to KRW15,763bn in FY 24. However, provisions for loan losses increased alarmingly at a CAGR of 44% over the same period. Net income therefore increased at a modest CAGR of 4.2% to KRW1,040bn in FY 24.

Its cash position strengthened to KRW15,481bn as of end-FY 24 from KRW7,422bn as of end-FY 19, supported by steady increase in debt issuance and considerable increase in deposits in FY 24. As a result, total debt increased from KRW26,569bn to KRW67,705bn over the same period.

In comparison, NH Investment & Securities, a local peer, posted a lower NII CAGR of 4.1% over FY 19-24, reaching KRW875bn. Net income rose at a CAGR of 7.6% to KRW687bn in FY 24.

Solid run in stock prices

Over the past 12 months, the company's stock has delivered solid returns of approximately 75%, reflecting the strength in the group’s fundamentals. In comparison, NH Investment & Securities delivered returns of about 50%. In addition, the company paid an annual dividend of KRW3980 in FY 24, resulting in an attractive dividend yield of 5.6%. Moreover, analysts expect an average dividend yield of 4.2 % over the next three years.

Despite the sharp run-up in the share's price, the company is trading lower compared to NH Investment & Securities. Korea Investment Holdings is currently trading at a P/B multiple of 0.6x, which is lower than NH Investment & Securities’ valuation of 0.7x. However, it is trading higher than its 3-year historical average of 0.4x.

Korea Investment Holdings is liked by all 12 analysts, who all  have ‘Buy’ ratings with an average target price of KRW113,416. However, the recent run-up in share prices means the target price has already been reached, implying limited upside potential. However, any correction in prices in the near term could provide a decent investment opportunity.

Analysts estimate earnings CAGR of 9.7% over FY 24-27, reaching KRW1,362m. Likewise, analysts estimate net profit CAGR of 5.5% for NH Investment & Securities over the same period.

Overall, the group is expected to grow its asset and AUM base, supported by encouraging performance of its leading subsidiaries in their respective fields. However, Korea Investment Holdings is prone to some risks, including credit risk, liquidity risk, regulatory roadblock and provision concerns.