Samsung Life Insurance hit by an earnings shock in its core business as business value also declines; Naver should team up with a global AI leader [Stocktopia]

[Financial News] Here is a roundup of major brokerage reports for the morning of Aug. 14.
Samsung Life Insurance has seen its target price cut after delivering second-quarter results in its core insurance business that fell well below market expectations.
Naver was also assessed as needing to strengthen cooperation with leading global AI companies if it wants to expand the long-term value of its artificial intelligence business. E-Mart had its target price lowered as weak performance at subsidiaries offset the recovery in its core discount store business.
◆Samsung Life Insurance (032830)— Hanwha Investment & Securities / Analyst Kim Do-ha
- Target price: 336,000 won (down 2.9% from 346,000 won) | Previous close: 291,500 won
- Investment opinion: Hold (maintained)
Hanwha Investment & Securities lowered its target price for Samsung Life Insurance to 336,000 won, saying the company posted second-quarter results in its core business that were far below market expectations and that its outlook for insurance profit had also weakened.
Insurance profit in the second quarter came to 276.6 billion won, down 50% from a year earlier. The decline was driven by a rise in loss ratios for both survival and death coverage, which pushed actual claims about 80 billion won higher than expected. Analyst Kim said the weakness in the investment segment was largely a one-off, but the deterioration in insurance profit would affect future earnings as well. He cut net profit estimates by 7% for this year and 6% for next year.
Kim explained, "The company has not clearly stated a shareholder return policy for the large special gains expected from Samsung Electronics," and added, "Rather than directly reflecting that expectation in earnings estimates, we will continue to value it through the discount to net asset value, or NAV." He said, "Upside from the current share price is limited," and maintained his Hold rating.
The value of Samsung Electronics shares held by Samsung Life Insurance rose by 1.3 trillion won, but the company has not said how it will return that gain to shareholders, making it difficult to fully reflect the benefit in the stock price.
◆Naver (035420)— Kiwoom Securities / Analyst Kim Jin-gu
- Target price: 320,000 won (unchanged) | Previous close: 226,500 won
- Investment opinion: Buy (upgraded)
Kiwoom Securities kept its target price for Naver at 320,000 won while revising its valuation framework to reflect both the medium-term investment burden in the commerce business and the company’s long-term growth potential. It also upgraded its recommendation from Outperform to Buy.
Analyst Kim Jin-gu said, "Sustainable medium- to long-term demand centered on AI agents is likely to form around frontier companies," and added, "It is necessary to verify whether Naver’s strategy of securing multiple customer groups based on Sovereign AI will lead to sustained demand and long-term top-line growth."
He added, "If Naver adopts a strategic decision-making framework that strongly aligns each B2C and B2B segment with global frontier companies for the medium- to long-term growth of its core businesses, then the potential for additional upside in corporate value can be considered more flexibly than under the existing valuation."
In other words, even if a large AI infrastructure is built, it is meaningless without customers that will use it for a long time. But if the company forms a proper partnership with a world-leading AI company, its valuation could be higher than it is now.※ Sovereign AIThis refers to AI that a country develops and operates on its own, based on its own data, language, and infrastructure. The concept emphasizes handling data domestically rather than relying on foreign big tech services, which is why governments and public institutions are seen as key customers.※ AI FactoryThis refers to a next-generation data center that houses a large number of graphics processing units, or GPUs. Unlike conventional data centers that handle a wide range of tasks, it is likened to a factory because it continuously produces AI outputs.
◆E-Mart (139480)— Samsung Securities / Analyst Baek Jae-seung
- Target price: 108,000 won (down 10.0% from 120,000 won) | Previous close: 78,100 won
- Investment opinion: Buy (maintained)
Samsung Securities lowered its target price for E-Mart to 108,000 won, saying the company is continuing to recover in its core discount store business, but weak performance at subsidiaries is weighing on consolidated results.
Same-store sales at discount stores rose 3.8% from a year earlier, marking the third straight quarter of growth. The improvement was supported by stronger consumer spending and less competition after Homeplus closed many stores. By contrast, SCK Company, which operates Starbucks in Korea, saw sales decline, while Shinsegae Engineering & Construction posted a wider loss. As a result, E-Mart recorded an operating loss of 43 billion won on a consolidated basis in the second quarter.
Analyst Baek said, "It is encouraging to see the core business recover, but weaker results at some subsidiaries led to disappointing consolidated earnings." He added, "The possibility of further deterioration in subsidiary performance appears somewhat limited compared with the second quarter," and said he maintained his Buy rating based on momentum in the core business.
The analyst said subsidiary weakness is likely near a bottom this quarter, and that discount store sales could rebound sharply in the third quarter as July same-store sales rose 8.6% and competition eased further.※ Same-store salesThis refers to sales at stores that have been open for more than a year, excluding newly opened locations. It is used to determine whether sales growth comes from store expansion or from actual business performance, making it a key measure of a retailer’s underlying strength.

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