Samsung Life Insurance, Expectations of a positive impact from "Samsung Electronics' stock price rise, dividend expansion, and governance restructuring"(Meritz Securities)

[Infostock Daily= Reporter An Hoe Hyun] Regarding Samsung Life Insurance, Meritz Securities said on the 20th that Samsung Life Insurance's stake in Samsung Electronics will increase 11.0% from the third quarter to increase its equity capital by 3.5%, maintaining its investment opinion 'Buy' and appropriate stock price at 98,000 won.

Meritz Securities expects Samsung Life Insurance to generate surplus of 15 trillion won at the end of 2020 and 7 trillion won at the end of 2021, despite stricter regulations on the Adequacy Assessment(LAT) of liability reserves.

It also predicted that Samsung Electronics' rise in stock prices will benefit from restructuring its governance structure. "It is estimated that the equity value of Samsung Electronics' holdings increased 11.0% compared to the third quarter, resulting in an increase in the value of holding contracts and a 3.5% increase in equity capital," the company explained, adding, "The possibility of benefiting from Samsung Electronics' special dividends or governance restructuring has increased."

"Rising interest rates and a strong stock market have increased the possibility of improving performance due to the reversal of variable guarantees," the company said, adding, "In addition, the reorganization of inheritance and governance related to Samsung Group will increase the possibility of Samsung Electronics expanding dividends to passing the Insurance Business Act, which will serve as a momentum for a rise in stock prices."

Reporter An Hoe Hyun ahh@infostock.co.kr