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Shinhan Financial Group Co Ltd (SHG)
NYSE:SHG
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Shinhan Financial Group Co
(NYSE:SHG)
Rating:71Outperform
Price Target:
$56.00
▲(11.29%Upside)
Shinhan Financial Group Co (SHG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$26.04B
Dividend Yield2.52%
Average Volume (3M)226.14K
Price to Earnings (P/E)8.1
Beta (1Y)0.81
Revenue Growth-3.37%
EPS Growth4.50%
CountryUS
Employees189
SectorFinancial
Sector Strength81
IndustryBanks - Regional
Share Statistics
EPS (TTM)2.18
Shares Outstanding485,494,930
10 Day Avg. Volume312,681
30 Day Avg. Volume226,137
Financial Highlights & Ratios
PEG Ratio1.53
Price to Book (P/B)0.65
Price to Sales (P/S)0.00
P/FCF Ratio8.93
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$54.01Price Target Upside7.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Shinhan Financial Group Co Business Overview & Revenue Model
Company DescriptionShinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Life Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. As of December 31, 2021, it operated a network of 784 service centers; 5,234 ATMs; 7 cash dispensers; and 85 digital kiosks. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.
How the Company Makes MoneyShinhan Financial Group Co. generates revenue primarily through interest income from its banking operations, fees and commissions from its diverse range of financial services, and investment income. The company's key revenue streams include net interest income from loans and deposits, fees from credit card services, and commissions from its asset management and securities brokerage services. Additionally, Shinhan benefits from strategic partnerships and its extensive network of domestic and international branches, which enhance its ability to provide comprehensive financial solutions and expand its customer base.
Shinhan Financial Group Co Earnings Call Summary
Earnings Call Date:Apr 25, 2025
(Q3-2024)
| % Change Since: 45.48%|
Next Earnings Date:Jul 25, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there were positive signs of interest income growth, cost management, and stable asset quality, significant challenges were highlighted by large derivative trading losses and a notable decline in noninterest income. Shareholder returns and capital adequacy provided some positive counterbalance, yet the overall sentiment leans towards concern over income volatility.Q3-2024 Updates
Positive Updates
Interest Income Growth
Interest income increased by 1.2% Q-o-Q, driven by growth in the bank's loan book and efficient asset-liability management.
Cost Management
SG&A expenses were well-managed, increasing only 1.2% Q-o-Q, contributing to an improvement in the group's cumulative CIR by 1.2 percentage points Y-o-Y.
Shareholder Returns
The Board approved a third-quarter dividend of KRW 540 per share and announced a share buyback and cancellation totaling KRW 400 billion.
Asset Quality
Bank delinquency rates remained stable, and card delinquency saw additional improvement due to proactive write-downs and sales of non-performing loans.
Capital Adequacy
The CET1 ratio improved by 7 basis points Q-o-Q, estimated at 13.13% as of September 2024.
Negative Updates
Derivatives Trading Loss
Shinhan Securities incurred large losses of KRW 135.7 billion due to a trade in KOSPI 200 Futures, impacting the group's noninterest income.
Noninterest Income Decline
Noninterest income decreased by 25.6% Q-o-Q due to losses on securities derivative transactions and valuation impairments on overseas alternative investments.
Net Income Decrease
Net income posted KRW 1.2386 trillion, down 13.1% Q-o-Q, affected by losses in the noninterest income segment.
NIM Decline
Shinhan Bank's NIM recorded 1.56%, down 4 basis points versus the prior quarter, due to lower market rates.
Company Guidance
During Shinhan Financial Group's Q3 2024 earnings call, several key metrics were discussed, reflecting the company's financial performance and strategic actions. The company reported a net income of KRW 1.2386 trillion, representing a decrease of 13.1% quarter-on-quarter (Q-o-Q), primarily due to large losses in the noninterest income segment, particularly a KRW 135.7 billion loss from derivatives trading by Shinhan Securities. Despite this, interest income increased by 1.2% Q-o-Q, driven by a 3.5% growth in bank won loans, contributing to an annual growth rate of 10.2% in this segment. The group's CET1 ratio was noted at 13.13% at the end of September 2024. Additionally, the Board approved a third-quarter dividend of KRW 540 per share and announced a share buyback and cancellation plan totaling KRW 400 billion to enhance shareholder returns. The company's cumulative credit cost ratio improved by 4 basis points, posting 44 basis points, and the cumulative cost-to-income ratio (CIR) improved by 1.2 percentage points year-on-year to 37.9%. These metrics underscore the group's focus on maintaining financial stability while addressing challenges in its securities segment.Shinhan Financial Group Co Financial Statement Overview
Summary
Shinhan Financial Group shows steady revenue growth and strong EBIT margins. However, moderate leverage and significant cash flow challenges, including negative Free Cash Flow growth, pose risks that need addressing.Income Statement
Shinhan Financial Group demonstrated steady revenue growth with a Revenue Growth Rate of 3.03% from 2023 to 2024. The Gross Profit Margin remained consistent, as Total Revenue equaled Gross Profit. Net Profit Margin improved slightly to 3.05% in 2024. However, the EBIT margin showed minor fluctuation, maintaining a strong position at 59.74% in 2024. The absence of EBITDA data limits the depth of analysis.70
Positive
Balance Sheet
The company's Debt-to-Equity Ratio stands at 2.34 in 2024, indicating a moderate level of leverage typical for the banking industry. Return on Equity (ROE) improved to 7.94% in 2024, reflecting effective use of equity. The Equity Ratio declined slightly to 7.58%, suggesting a small increase in financial leverage, which could pose some risks if not managed carefully.65
Positive
Cash Flow
Shinhan Financial Group experienced a significant decline in Free Cash Flow, leading to a negative Free Cash Flow Growth Rate. The Operating Cash Flow to Net Income Ratio was negative in 2024, indicating challenges in converting earnings into cash. The Free Cash Flow to Net Income Ratio was also negative, suggesting cash flow difficulties which need to be addressed to improve financial stability.50
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 14.61T | 14.18T | 24.56T | 25.75T | 20.64T |
| Gross Profit | 14.61T | 14.22T | 13.78T | 20.84T | 20.64T |
| EBITDA | 7.31T | 7.15T | 7.37T | 6.49T | 0.00 |
| Net Income | 4.45T | 4.37T | 4.67T | 4.02T | 3.41T |
Balance Sheet | |||||
| Total Assets | 10.00T> | 10.00T> | 10.00T> | 10.00T> | 10.00T> |
| Cash, Cash Equivalents and Short-Term Investments | 10.00T> | 30.40T | 29.90T | 94.37T | 92.87T |
| Total Debt | 10.00T> | 10.00T> | 10.00T> | 10.00T> | 10.00T> |
| Total Liabilities | 10.00T> | 10.00T> | 10.00T> | 10.00T> | 10.00T> |
| Stockholders Equity | 56.05T | 53.72T | 48.44T | 47.29T | 44.07T |
Cash Flow | |||||
| Free Cash Flow | -34.51T | -186.39B | 6.65T | 10.19T | -5.05T |
| Operating Cash Flow | -34.25T | 529.85B | 7.59T | 11.08T | -4.41T |
| Investing Cash Flow | 148.53B | -4.27T | -11.03T | -12.03T | -3.03T |
| Financing Cash Flow | 38.69T | 9.76T | 3.39T | 4.96T | 7.88T |
Shinhan Financial Group Co Technical Analysis
Positive
50.32
Price Trends
42.34
Positive
37.54
Positive
37.53
Positive
Market Momentum
2.37
Negative
71.34
Negative
84.41
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHG, the sentiment is Positive. The current price of 50.32 is above the 20-day moving average (MA) of 46.25, above the 50-day MA of 42.34, and above the 200-day MA of 37.53, indicating a bullish trend. The MACD of 2.37 indicates Negative momentum. The RSI at 71.34 is Negative, neither overbought nor oversold. The STOCH value of 84.41 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHG.
Shinhan Financial Group Co Risk Analysis
Shinhan Financial Group Co disclosed 46 risk factors in its most recent earnings report. Shinhan Financial Group Co reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
The implementation of IFRS 17 beginning on January 1, 2023 renders certain of our historical financial information as of December 31, 2021 and for the year ended December 31, 2021, included in this annual report, not directly comparable with our financial information as of December 31, 2022 and 2023 and for the years ended December 31, 2022 and 2023 included in this annual report. Q4, 2023
2.
Evolving regulatory framework for artificial intelligence and machine learning technology, may have an adverse impact on our business, financial condition and results of operations. Q4, 2023
3.
Our business may be materially and adversely affected by legal claims and regulatory actions against us. Q4, 2023
Shinhan Financial Group Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $30.34B | 8.07 | 10.66% | 2.47% | -3.00% | 32.85% | |
77 Outperform | $17.69B | 11.45 | 16.35% | 9.94% | 3.89% | 15.26% | |
74 Outperform | $14.30B | 7.25 | 9.43% | 2.37% | -0.86% | 13.17% | |
71 Outperform | $26.04B | 8.10 | 8.79% | 2.52% | -3.37% | 4.50% | |
70 Outperform | $28.37B | 9.21 | 10.61% | 0.92% | -9.78% | 27.43% | |
70 Outperform | $18.62B | 15.62 | 10.89% | 5.53% | -3.94% | 31.52% | |
68 Neutral | ¥722.98B | 10.78 | 7.55% | 3.29% | 7.93% | 15.81% |
* Financial Sector Average
Performance Comparison
SHG
Shinhan Financial Group Co
50.32
12.23
32.11%
BBD
Banco Bradesco SA
2.92
0.71
32.13%
BSBR
Banco Santander Brasil
4.98
-0.06
-1.19%
BAP
Credicorp
221.82
62.35
39.10%
KB
Kb Financial Group
85.57
24.74
40.67%
WF
Woori Finance Holdings Co
57.36
24.81
76.22%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.