Samsung Life Insurance Earnings: Investment Profit Buoyed by One-Off Gains

We raise our fair value estimate for Samsung Life Insurance slightly to KRW 77,000 from KRW 76,000. Our new fair value estimate is equivalent to 0.35 times book value as of March 2023 and 9.1 times our earnings forecast for 2023. It represents 16% upside from the current share price. We continue to view Samsung Life as a relatively lackluster investment due to its chronically low return on equity (average of only 5% since its IPO in 2010), but see the shares as undervalued at their current price of 0.30 times book value. We think better visibility into future dividend increases could be a catalyst for revaluation, but first-quarter earnings—the first quarter Samsung Life has reported under new IFRS 17 accounting—did not provide any news on the dividend visibility front. Our forecast remains for dividends of KRW 3,300 per share for 2023 (up from KRW 3,000 for 2022), increasing by KRW 200 annually thereafter.