Brokerage says SpaceX IPO could unlock another W1.3tr in gains
Mirae Asset Securities became the first South Korean brokerage house to post a quarterly net profit of over 1 trillion won ($673 million), riding high on the domestic stock market rally and overseas expansion.
Mirae Asset posted consolidated revenue of 14.43 trillion won and operating profit of 1.38 trillion won in the first quarter. The figures marked increases of 138.4 percent and 297.2 percent, respectively, from a year earlier.
Net profit also jumped 288 percent on-year to 1.0019 trillion won, making Mirae Asset the first local brokerage firm to surpass the 1 trillion won mark in quarterly net profit.
Riding on the Korean stock market rally, its total assets under management increased to 660 trillion won at the end of the first quarter, up about 58 trillion won in three months. The figure, which includes both domestic and overseas assets, has since surged to 776 trillion won as of May 10.
Overseas subsidiaries posted their strongest performance ever: First-quarter pretax profit from overseas units came to 243.2 billion won, and annualized return on equity after tax was estimated at around 14 percent.
The Hong Kong unit recorded a record quarterly pretax profit of 81.3 billion won, while the New York subsidiary posted 83 billion won. Wealth management client assets in emerging countries such as India, Vietnam and Indonesia continued their steady growth, reaching 78 trillion won as of the end of March.
Buoyed by the strong overseas performance, Mirae Asset plans to further expand its global business operations.
The brokerage firm is set to launch a mobile trading system in Hong Kong next month to broaden its global retail client base, following its acquisition last month of regulatory approval to provide digital asset trading services to retail investors in the city state.
Mirae Asset is also pushing to acquire a brokerage firm in the US to strengthen its global capabilities, as the introduction of omnibus accounts for foreign investors is expected to accelerate global capital flows into the Korean stock market.
Further gains in SpaceX
Mirae Asset's principal investment remained profitable for a fifth consecutive quarter, generating 804 billion won in valuation gains. The performance highlights the company's push toward higher-yield investment opportunities beyond traditional brokerage commission income.
SpaceX, one of Mirae Asset’s flagship principal investments, is expected to generate additional valuation gains when it proceeds with a public listing, the company said.
With an initial investment of 800 billion won, SpaceX is believed to have accounted for a significant portion of Mirae Asset's 804 billion won in valuation gains. Expected to go public by the end of June, the rocket company is projected to reach a post-listing valuation of between $1.75 trillion and $2 trillion.
"If SpaceX’s valuation reaches $1.75 trillion, Mirae Asset is expected to book an additional gain of around 1.3 trillion won," CFO Lee Kang-hyuk said at an earnings call held Tuesday.
Lee further explained the gains from investment assets should not be dismissed as merely one-off valuation profits, as they reflect the firm's core capabilities and recurring earnings capability.
Separately, the brokerage announced it had generated profits of 156 billion won in the first quarter by securing investment opportunities in a Hong Kong-listed company.
silverstar@heraldcorp.com
