Mirae Asset shares to bounce back on partnership with Naver

Mirae Asset Daewoo headquarters in Seoul / Courtesy of Mirae Asset Daewoo

By Lee Min-hyung

The stock price of Mirae Asset Daewoo is expected to bounce back on news of its partnership with Naver amid an optimistic outlook for their collaboration in digital finance, a report by Kyobo Securities said Tuesday.

The nation's leading securities firm has maintained a strategic partnership with the dominant portal operator here since December 2016. In 2017, both sides invested 500 billion won ($450 million) each for purchasing each other's shares, with a view to enhancing their foothold in the global digital finance market.

The partnership includes joint research in artificial intelligence and investment in promising fintech startups.

In the report, Kyobo Securities analyst Kim Ji-young expected Mirae Asset shares to hit 14,000 won, as its partnership with Naver will generate tangible outcomes in their earnings throughout 2021.

"We recommend investors purchase Mirae Asset shares, as its ongoing financial collaboration with Naver will have a positive impact on the firm's share price movement," Kim said.

Mirae Asset shares are trading at around 9,600 won as of Tuesday, but it will be able to jump on track for a stable rebound in 2021, according to the analyst.

"The company's active shareholder return policies ― including share buyback and dividend offering ― will also give a boost to its share price."

In retail finance, Mirae Asset and Naver have launched a series of digital financial products ― such as cash management accounts. Naver is also widening ties with Mirae Asset Financial Group's other affiliates, including Mirae Asset Life Insurance and Mirae Asset Global Investments.

The two companies are also operating Mirae Asset-Naver Asia Growth Fund, which is worth 1 trillion won, and investing in promising companies not just in finance, but also other emerging areas such as healthcare and internet platforms.

Naver has reported steep growth throughout 2020 amid the rise of non-face-to-face transactions amid the coronavirus pandemic. Naver's stock price more than doubled in the past year thanks to the global boom of in-home consumption and contactless payments. Naver operates its online payment service, Naver Pay, and plans to accelerate its expansion into the online financial sector with its subsidiary, Naver Financial.

Earlier, Mirae Asset achieved a record operating profit of 1.12 trillion won for 2020, up 51.76 percent from a year earlier, on the stable and robust growth of its overall businesses encompassing wealth management, investment banking and overseas business. This year was the first time that a Korean securities firm has reported an annual operating profit of more than 1 trillion won.

The company also shared its plan to buy back its own shares worth 100 billion won during the regulatory filing. Mirae Asset set the deadline for this plan for April 28.

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