Mirae Asset Securities recorded a pre-tax and net loss on a consolidated basis for the third quarter. However, it is assessed that the company generated stable profits when excluding losses related to SpaceX. On a cumulative basis for the first three quarters, pre-tax profit was 3 trillion 357 billion won, and net income was 2 trillion 5016 billion won, showing a substantial increase compared to the same period last year. Mirae Asset Securities announced a new shareholder return policy to be applied from 2027 to 2029, with plans to cancel treasury stock worth 1 trillion 400 billion won next year.
Turned to loss in Q3 but generated stable profits
Mirae Asset Securities disclosed on the 12th that it recorded a pre-tax loss of 5206 billion won and a net loss of 4056 billion won (provisional) on a consolidated basis for the third quarter. However, cumulatively for the first three quarters, pre-tax profit was 3 trillion 3657 billion won, and net income was 2 trillion 5016 billion won, increasing by 156% and 148%, respectively, compared to last year. The annualized return on equity (ROE) based on net income was 24%, up 13 percentage points from last year.
The company explained that while it turned to a loss due to the reflection of pre-tax losses related to SpaceX in the third quarter, it is generating stable profits. The pre-tax loss related to SpaceX was 5140 billion won, and excluding this, consolidated pre-tax profit was 380 billion won.
SpaceX was valued based on the closing price of $150.86 at the end of September last month. This represents a 12% decline compared to $170.86 at the end of the second quarter. Exchange rates also had an impact. The exchange rate applied in the third quarter was 1,463 won, down 21 won from the previous quarter. However, profits generated from hedge transactions executed during the quarter partially offset the losses.
The cumulative valuation gain on SpaceX this year is 2 trillion 309 billion won. The total acquisition amount was approximately 1 trillion 100 billion won, and the valuation amount as of the end of the third quarter was approximately 4 trillion won. Lee Kang-hyuk, Senior Executive Vice President of the Business Innovation Division at Mirae Asset Securities, stated in an earnings call that day, "As the value of investment assets has risen significantly compared to their acquisition cost, the impact of stock price fluctuations on quarterly earnings has expanded." He added, "However, we are maintaining cumulative valuation gains since the initial investment based on an acquisition unit price of $34, and our company's perspective on holding SpaceX remains valid given its medium- to long-term growth potential."
Brokerage fee revenue was 3306 billion won, down 47% from the previous quarter as market trading volume decreased. However, it increased by 25% compared to the same period last year. Wealth Management (WM) division fee revenue was 1236 billion won, down 6% from the previous quarter but up 35% from last year. The company explained that asset management and fee revenues, which are less sensitive to market volatility, are becoming a stable foundation for earnings.
Trading and other financial gains/losses decreased from the previous quarter due to the base effect of the second quarter. Management and other financial gains/losses were 1439 billion won, down 80%, while distribution and dividend income was 556 billion won, down 50%. On a cumulative basis for the first three quarters, this figure was 1 trillion 4414 billion won, up 38% from last year. Private Investment (PI) losses, including SpaceX, were 5200 billion won.
1.4 trillion won treasury stock cancellation next year… "Using overseas subsidiary profits as a source for shareholder returns"
In accordance with its new shareholder return policy applicable from 2027 to 2029, Mirae Asset Securities plans to cancel treasury stock worth 1 trillion 400 billion won (based on the closing price on the 11th) immediately after next year's regular shareholders' meeting. The company will cancel 65 million shares, which is 60% of its currently held common stock treasury shares (100 million 833 thousand 851 shares). The remaining 40% will be disposed of in installments over five years, with a portion to be utilized for employee compensation and financial structure improvement.
The shareholder return ratio was presented as at least 35% of consolidated adjusted net income. The company plans to apply adjusted net income excluding SpaceX gains/losses from consolidated net income. Going forward, if investment profits from SpaceX are realized, the company will pursue additional shareholder returns beyond the existing 35% target.
Overseas subsidiaries also recorded a pre-tax loss of 1393 billion won, but excluding losses such as those related to SpaceX, pre-tax profit was 690 billion won. Cumulative pre-tax profit for the first three quarters was 7130 billion won, setting an all-time high.
Regarding Sanko Securities in Japan, for which a recent acquisition was announced, Senior Executive Vice President Lee stated, "The structure involves acquiring 100% of Sanko Securities' shares through a U.S. holding company, a decision made considering the linkage between Japan and the United States, the world's largest capital market." He added, "We will strengthen our stock futures and options business as well as proprietary trading in Japan, while preparing the personnel and systems necessary for entering online wealth management." The target timing for launching Mobile Trading System (MTS) services in Japan was set at one and a half to two years after the completion of the acquisition.
Mirae Asset Securities is fully launching its online WM business through its Hong Kong subsidiary and is preparing for expansion into Singapore, Japan, the United States, and Australia. The company aims to utilize profits generated by overseas subsidiaries as a source for shareholder returns going forward.
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