Meritz Financial Group (138040) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
Meritz Financial Group is a financial holding company that owns non-life insurance (Meritz Fire & Marine Insurance), securities (Meritz Securities) and a capital business as wholly owned subsidiaries, with insurance underwriting profit and securities fees and investment gains making up most of the group's earnings. First-quarter 2026 net profit was ₩680.2 billion, up 9.6% from a year earlier, and return on equity (ROE) reached 25.4%, among the very highest of any Korean financial firm. What stands out lately is that while the combination of high ROE and a shareholder-return policy that channels payouts into share buybacks and cancellations rather than dividends keeps steadily lifting per-share value, earnings can wobble if insurance loss ratios rise or if the securities arm's real-estate finance is hit by the economic cycle.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “Banks” (Financials), a type typically read first through P/B.
Banks earn by putting capital to work through deposits and loans, so what matters is how much equity (net assets) they hold and how efficiently they use it, more than headline profit. That makes price-to-book (P/B) the first lens — but it should be read alongside ROE, which shows how much profit the equity generates.
Price against assets alone says little about where the cycle stands. Reading it together with price against this year's expected earnings shows how far profits have recovered.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- For financial companies, debt and interest costs are large by the nature of the business, so the debt ratio and interest coverage cannot be read on the same yardstick as an ordinary company.
- ROE is 22.0% (controlling-interest basis). It is above the sector average.
- A sector-metric and in-depth research verdict — see “Valuation vs peers” below for the basis.
Ownership & governance As of 2025-12-31
Largest shareholder Cho Jung-ho 55.78% (individual)
Controlling bloc incl. related parties 56.13%
With the controlling bloc holding 56%, control is very secure but the free float is thin.
Financial-group subsidiaries stake
| Meritz Hyundai Investment Real Estate Strategy No. 1 Private Equity Fund | sub-subsidiary | 49.3% |
🔎 In-depth analysis Reading
Meritz Financial Group is a holding company that owns three financial subsidiaries outright. The main earnings pillar is the non-life insurer Meritz Fire & Marine Insurance. It makes money from underwriting profit, the premiums collected on auto, long-term and general insurance minus claims paid, and from investment income earned by managing accumulated premiums. The second pillar is Meritz Securities, which earns profit from trading commissions along with investment-banking activities such as real-estate project financing (PF) and corporate finance. Meritz Capital adds to this through lending and leasing. In the first quarter of 2026, Meritz Fire posted a standalone net profit of ₩466.1 billion and Meritz Securities a consolidated ₩254.3 billion, with both pillars growing evenly. In short, this is a structure that earns steadily from insurance and earns more from securities as the economic cycle allows.
The latest close is ₩125,700 and the market capitalization is ₩21.0 trillion. The price sits above its 20-day moving average (₩118,465) and above its 60-day moving average (₩111,215). It holds above both its short- and medium-term moving averages, so the trend looks healthy. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 62.2, a neutral level. The one-month change is +9.9%, the three-month change is +12.6%, and the position relative to the 52-week high is -14.0%. Relative strength versus the KOSPI is 51 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 51% of all stocks. Over the past three months it outpaced the index by 32.1%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
The P/E ratio (how many times one year's earnings the price represents) is 9.14x. The P/B (how many times book shareholders' equity the price represents) is 1.96x. The key point is that ROE (how much is earned in a year on equity) was 22.3% in 2025 and 25.4% on a Q1 basis, among the highest of any Korean financial firm. High ROE is the grounds that justifies a P/B above 1x, since it is natural for a company that earns more on its capital to be valued above book. Liabilities look large at ₩135 trillion on the balance sheet, but these are mostly policy reserves owed back to insurance policyholders and customer deposits at the securities arm. Because they differ in nature from an ordinary company's debt, the debt ratio alone is not a reliable measure of risk. No dividend yield is shown, because the company set the 2025 year-end cash dividend at zero and decided to direct that entire pool into share buybacks and cancellations.
Looking at the earnings trend, net profit settled at a high level of ₩2.04 trillion in 2023, ₩2.31 trillion in 2024 and ₩2.30 trillion in 2025. That 2025 was roughly flat with the prior year can be read as a period of stability after earnings reached a normal footing following the full conversion of subsidiaries into wholly owned units in 2023. First-quarter 2026 net profit of ₩680.2 billion, up 9.6% from a year earlier, marked a return to growth. Operating profit rose 18.4% to ₩854.8 billion. The growth drivers were the two subsidiaries: Meritz Fire protected its insurance profit with a profitability-focused approach, while Meritz Securities led the recovery with net profit up 35.7% year on year. If this growth carries through the full year, annual net profit has room to exceed 2025. On last year's confirmed earnings the P/E is 8.5x, but on a forward basis reflecting this year's higher earnings it works out lower than that. This is a phase where growing earnings make the valuation more attractive.
The most notable development is the shareholder-return policy. In its 2025 year-end results the company set the cash dividend at zero and decided to direct that entire pool into share buybacks and cancellations. It is a decision rooted in the calculation that, when a stock is judged to be undervalued, cancelling shares lifts per-share value more than paying dividends does. As a result of this decision, the overall shareholder-return ratio actually rose to 53%. The company also separately disclosed a corporate value-up plan and reviews the plan's progress each quarter. On the earnings side, it announced preliminary Q1 2026 results through a fair-disclosure filing and disclosed subsidiary results at the same time. It also regularly holds investor-relations (IR) events to communicate with shareholders.
Meritz Financial Group's strengths come down to two points. First, with ROE above 22%, its capital efficiency is among the highest of any Korean financial firm. Second, it returns more than half of the profit it earns through share buybacks and cancellations, steadily lifting per-share value. As long as this combination holds, the share left over for shareholders grows. Even though the P/E on last year's confirmed earnings may not look low, once this year's higher earnings are reflected it is in fact on the cheaper side relative to earnings. The cautions are equally clear, however. In insurance, profit is squeezed if the loss ratio on auto and long-term policies rises. In securities, a share of business is in real-estate project financing, so the risk of losses grows if the property and interest-rate environment worsens. In short, this company is strong when insurance loss ratios are stable and the securities environment is supportive, and weaker when real-estate finance freezes up or insurance loss ratios spike.
🔎 Valuation vs peers Fairly valued
Given its character as a financial holding company spanning non-life insurance and securities, the peer set is chosen as large non-life insurers and a life-insurance holding company.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| DB Insurance | 5.85x | 0.90x | 13.79% |
| Hyundai Marine & Fire Insurance | 3.23x | 0.59x | 18.82% |
| Samsung Fire & Marine Insurance | 14.33x | 1.20x | 8.47% |
| Samsung Life Insurance | 24.97x | 0.71x | 3.53% |
Meritz Financial Group's P/B of 1.9x is higher than the peer set (0.6-1.4x). But it has to be viewed alongside the fact that its ROE of 22.3% is clearly higher than the peer set (3.7-19.8%). It is natural for a company that earns more on its capital to be valued more richly against book, so this P/B premium is explained by the high ROE. The P/E of 8.5x is lower than Samsung Fire & Marine (14.6x) and Samsung Life (29.3x) but higher than DB Insurance (6.0x) and Hyundai Marine & Fire (3.1x), a mid-range position. Because last year's earnings were roughly flat with the prior year, the P/E on confirmed earnings may not look low, but Q1 earnings rose 9.6%, returning to growth. On a forward basis reflecting this year's higher earnings, the P/E falls below 8.5x. Taken together, given the high ROE and strong shareholder returns, the current valuation is hard to view as an excessive premium and is judged to be at a fair level.
Price history Close · MA20 · MA60
The latest close is ₩125,700 and the market capitalization is ₩21.0 trillion. The price sits above its 20-day moving average (₩118,465) and above its 60-day moving average (₩111,215). It holds above both its short- and medium-term moving averages, so the trend looks healthy. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 62.2, a neutral level. The one-month change is +9.9%, the three-month change is +12.6%, and the position relative to the 52-week high is -14.0%. Relative strength versus the KOSPI is 51 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 51% of all stocks. Over the past three months it outpaced the index by 32.1%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M +32.09% / 6M -15.83% / 12M -44.33%
Key metrics Computed vs whole-market median
Valuation
The P/E of 9.14x is below the whole-market median (12.97x). The P/B of 1.96x is above the whole-market median (0.84x).
Profitability & financials
Return on equity (ROE) is 22.0%, above the whole-market average (3.0%). The debt ratio is 1238.2%, but for financial firms deposits and insurance liabilities count as debt, so it cannot be read on the same yardstick as an ordinary company.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | — | — | — | — |
| Operating profit | $2.1B | $2.2B | $2.0B | -9.91% ↓ slower |
| Net profit | $1.4B | $1.6B | $1.6B | -0.25% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | — | — | — | — | — |
| Operating profit | — | — | $2.1B | $2.2B | $2.0B |
| Net profit | — | — | $1.4B | $1.6B | $1.6B |
Operating profit fell 9.9% year over year. The decline widened.
Latest quarterly results Source
No recent quarterly results confirmed from DART.
Technical indicators Computed
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
- ROE of 22.0% points to solid profitability.
Points to watch
- The figures shown are based on the last annual report as of the writing date, so it is best to review the latest quarterly results and filings alongside them.
Recent news & events searched · sourced
- 2026-02-01DividendThe 2025 year-end cash dividend was set at zero, with the dividend pool directed entirely into share buybacks and cancellations. The overall shareholder-return ratio rose to 53%.A policy that, in an undervalued phase, chooses cancellations over dividends to lift per-share value. For investors expecting a dividend yield, cash inflow declines, but per-share earnings and net assets increase as the share count falls. Source
- 2026-05-14EarningsPreliminary consolidated Q1 2026 results were disclosed — net profit of ₩680.2 billion (+9.6%), operating profit of ₩854.8 billion (+18.4%), and a Q1 ROE of 25.4%.Meritz Fire (standalone net profit of ₩466.1 billion) and Meritz Securities (consolidated net profit of ₩254.3 billion, +35.7%) grew together, turning earnings back to growth. Source
- 2026-05-14FilingCorporate value-up plan (voluntary disclosure) — Q1 2026 progress. The shareholder-return target and the status of the share-cancellation policy are reviewed and disclosed on a quarterly basis.Grounds for transparently verifying the continuity and execution of the shareholder-return policy. If the policy keeps being carried out, expectations for per-share value enhancement are sustained. Source
- 2026-04-22IRInvestor-relations (IR) event notice — management directly explains results, capital allocation and shareholder-return policy.Improves the predictability of policy by continuing to share the principles for allocating capital between internal investment and shareholder returns. Source
Figure cross-check computed ↔ external
Recent filings Source
- 2026-05-29OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-29OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-29PeriodicQuarterly report (amended)
- 2026-05-15PeriodicQuarterly report
- 2026-05-14Disclosure
- 2026-05-14EarningsFair-disclosure notice
- 2026-05-14EarningsFair-disclosure notice
- 2026-05-14EarningsFair-disclosure notice
- 2026-04-29OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-29OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-22Disclosure
- 2026-04-06PeriodicAnnual business report (amended)
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.