South Korean companies face scrutiny over Q3 earnings and shareholder returns

Major South Korean corporations are facing varied outlooks for their third-quarter performance, with analysts focusing on shareholder return strategies and investment outcomes.

Korea Investment & Securities lowered its target price for HD Korea Shipbuilding & Offshore Engineering by 17% to 440,000 won, citing decreased equity value in its shipbuilding subsidiaries. While third-quarter operating profit is expected to reach 1.502 trillion won—a 42.5% increase year-on-year—the firm emphasized that future growth depends on successful new investments rather than just dividend payouts.

In the insurance sector, DB Insurance and Samsung Fire & Marine Insurance are navigating volatility caused by valuation losses on investment assets. NH Investment & Securities maintained a 'buy' rating for DB Insurance, noting that its aggressive dividend policy and overseas M&A potential provide a floor for its stock price despite potential earnings fluctuations. Similarly, for Samsung Fire & Marine Insurance, analysts suggest that while third-quarter net profit may fall below market expectations due to investment losses, the company's robust capital reserves and potential for new business investments and shareholder returns remain key drivers for its valuation.