MIRAE ASSET SECURITIES

Transcription

1 MIRAE ASSET SECURITIES Investor Presentation Total Asset Management Consulting Company MIRAE ASSET Securities Q2 FY2007 1

2 DISCLAIMER This presentation may contain forward-looking statements about Mirae Asset Securities and unaudited preliminary figures internally collected as of September These figures are subject to change without prior notice, and Mirae Asset Securities is neither obligated to provide revisions, nor responsible for any loss or inconvenience caused by changes regarding the projection and forecast presented in this document. 2

3 TABLE OF CONTENTS I Corporate Overview II Financial Highlights III Operational Performance - Asset Management - Brokerage - Investment Banking - Corporate Pension IV Growth Strategy - Changing Market Environment - Long-term Growth Drivers Appendix 3

4 I CORPORATE OVERVIEW I. Innovator in Korea Capital Market II. Mirae Asset Group Structure III. Mirae Asset AUM IV. Group Synergy Creation 4

5 I. Corporate Overview Innovator in Korean Capital Market as MAS led the capital market in Korea thru "First-See" & "First-In strategy Korea s first mutual fund First wrap account & installment-type investment First real estate fund&pef First int'l asset management company First int'l investment fund First Retirement Annuity Institute First Biz Unit System First Simultaneous Nationwide Branch Investment Seminar Opened the era of indirect investment Mutual fund Create the market for installment funds Wrap account Installment fund Leading alternative investment market Real estate fund PEF Int'l investment fund Variable insurance Corporate Pension 5

6 I. Corporate Overview Within in the Mirae Asset Group, Mirae Asset Securities is at the core of the group s sales channel well positioned to benefit from the group s asset management arm Financial Group Mirae Asset Investment Management Mirae Asset MAPS Invest. Mgmt. Mirae Asset Global Invest. Mgmt. (Asia) (Singapore) Mirae Asset Global Invest. Management (Hong Kong) Asset Management Arm Mirae Asset Securities Mirae Asset Life Insurance Mirae Asset Capital Mirae Asset Venture Investment Investment Arm MAS HK MAS Vietnam 6

7 I. Corporate Overview Mirae Asset investment arm continues to lead the indirect investment market with superior fund performance and 13% M/S within industry (30% M/S for equity-type fund) Indirect Investment Mkt. Equity Fund Mkt. Equity Fund Return 350 (KrW Trillion) Total Market (LHS) MAG (RHS) 34.1 M/S 13% (KrW Trillion) Total Equity-type Market (LHS) MAG (RHS) M/S 30% Mirae Asset Discovery Fund KOSPI Index 782% +569% 213% Source: AMAK Source: AMAK Source : Zeroin 7

8 I. Corporate Overview Excellent Management Skill Dominance in equity fund market Brand Power Source of stable brokerage revenue - Captive for equity transaction (50% rule) Mirae Asset Capital, PEF Mirae Asset Securities M&A Collaboration Share information and perform joint projects Pre IPO business Venture Investment company s IPO Mirae Asset Investment Mgt. Affiliates Growth of variable insurance market Increasing brokerage transaction Pursue organic business Synergy for corporate pension & IB Biz Support capital loan during big deal Mirae Asset Life Insurance 8

9 II FINANCIAL HIGHLIGHTS I. Diversified Revenue & Superior Return II. Differentiated Business Focus III. Managing Growth and Cost 9

10 I. Diversified Revenue & Superior Return MAS continuously maintains advanced and balanced revenue structure with comparatively high revenue proportion from asset management business Net Revenue FY2006(E) OP Margin & ROE Asset Management - Beneficiary certificates - Wrap account - Bancassurance 32% 6% 57% 20 0 (20) 9% FY00 15% 13% 22% FY03 19% 32% 26% MAS S W H FY06 Brokerage Investment Banking - Underwriting & IPO - Prop. trading - Fixed income securities - Principal Investment Interest Profit & Other 28% 22% 18% MAS 10% 27% Peer Group MAS Industry FY02 FY03 FY04 FY05 FY06 (E) -4.4 Source : Prudential Estimates for Source : Peer group includes industry Top 4 brokers ( 06.3~ 07.2) (Net Revenue = Operating Income - Operating Expenses excl. G&A expenses) 10

11 II. Differentiated Business Focus MAS core strength lies in the asset management consulting business accompanied by high growth in other asset management related businesses Asset Management 45 (KrW Billion) Brokerage (Equity) Investment Banking Interest Profit & Other (KrW Billion) 160 (KrW Billion) 25 (KrW Billion) CAGR 58% CAGR 31% CAGR 21% 15 CAGR 22% FY03 FY04 FY05 FY06 FY03 FY04 FY05 FY06 FY03 FY04 FY05 FY06 FY03 FY04 FY05 FY06 BC Sales, WA, BA, Advisory Fee etc. 11

12 III.Managing Growth and Cost On the back of strong growth in the asset management business, MAS has been able to grow the size of the revenue and efficiently manage costs Revenue Growth Cost Management CAGR 35% (KrW Billion) (KrW Billion) FY03 FY04 CAGR 22% FY05 FY06 Net Income Growth Strategy Expand Branch Network Strengthen Fee Base & On-Line New Business FY03 FY04 FY05 FY06 3,000 2,000 1,000 (KrW Billion) CAGR 61% 915 1,157 2,926 FY03 FY04 FY06 FY06 (E) CMA & OTC Products Overseas Brokerage Globalization & IB HK/Vietnam/UK/India Principal Investments Source : Prudential Estimates for 12

13 III.Managing Growth and Cost MAS has been strategically expanding its local branch network in the recent quarters already seeing economies of scale taking effect and will further promote CMA to accelerate this phenomenal growth Growth Strategy Expand Branch Network Strengthen Fee Base & On-Line New Business CMA & OTC Products Overseas Brokerage Globalization & IB HK/Vietnam/UK/India Principal Investments # of Branch AUM Growth FY03 0% 0% FY04 3% 23% FY05 69% 64% FY06 97% Q2 214% 151% 342% MAS CMA M/S # of CMA Accounts (Industry in Mn) 11% 15 MAS Fund AUM (KrW Trillion) # of Branches % 10% 32% 24% 22% 15% 11% Dealing Structured Finance Underwriting % % 13% 57% Principal Investments FY03 FY04 FY05 FY06 Q Net Revenue (1H ) IB

14 III OPERATIONAL PERFORMANCE I. Asset Management II. Brokerage III. Investment Banking IV. Corporate Pension 14

15 I. Asset Management Fund balance grew 12% QoQ led by strong growth in both overseas and domestic funds growing 31% and 16% respectively (KrW Billion) Others MMF Balanced Fund Fixed-Income Fund Domestic Stock Fund Overseas Stock Fund Other : PEF, REIT etc. Equity-type Proportion Fund Sales Balance & M/S 5, ,337 1,096 1,065 1, ,312 8,659 9,914 1,138 1, , , ,984 3, , ,223 1,406 1,558 2, , ,876 2, , ,114 2, ,037 3, ,238 3,882 3, ,656 2, ,316 25% 53% 54% 53% 55% 58% 63% M/S 4,494 31% 4.0% 3.0% 4,733 32% % 5.0% 2.0% Asset Management Biz Trust Wrap Account CMA Advisory Fund Total % 2.5% 24 Trillion % 0% # of Installment-type Account Industry (mn) MAS M/S % %

16 II. Brokerage In addition to maintaining dominant position in sales of asset management products and services, equity brokerage M/S recovered historical high of 8.4% with institutional proportion continuing to increase further (Institutionalization) Brokerage M/S (FY2006) Brokerage breakdown MAS M/S & Ave.fee 6.1% Q2 6.8% 8.4% 6.9% 7.1% 7.7% Trading Value 15% 21% 3% 2% 82% 77% Off-Line (Ins.) Off-Line (Retail) On-Line (Retail) Commissions 37% 42% 15% 12% 48% 46% 5.7 FY FY FY (M/S %) Q2 (Ave.fee bp) H W S MAS D1 FY06 Q2 FY06 Q2 FY04 FY05 FY06 Q2 Source : MAS, data from each company 16

17 III.Investment Banking MAS lead Korea s Financial market thru development of alternative investment products and has extensive knowledge and expertise in IPO and selling structured finance related products KOSDAQ IPO M/S (CY) Structured Finance (FY06) Alternative Investments (FY06) (USD Million) (In 100 Million KrW) (In 100 Million KrW) Category Category # Issue Amt Category Details Amt Amt Real-Estate Development ABS ABCP ,218 15,100 Vessel Fund Ship Bld. Fund Changmyung SPP Ship Bld No.of IPO ABS 3 1,750 Real Asset F Agricultural, Wine 80 M/S (%) ABCP 12 10,705 Underwriting OTC Products Daewoo Cons. # of offering 1,200 Amt Rank ELS 117 6,573 Fee Source: Bloomberg (Calendar Year Base) (In bn KrW) 30 Prop Trading Gain DLS ELW Total , , FY01 FY03 FY05 (E) DLS Public Offering M/S 79% Overseas Mineral fund, Carbon fund, Korea Beef Cattle Fund 2, Art Fund are under consideration 17

18 IV.Corporate Pension MAS s M/S in the securities industry corporate pension segment is already 20%, well positioned to grasp future growth leveraging Mirae Asset s brand power Corporate Pension M/S Fund Performance ( 06) Corporate Pension Outlook (KrW Trillion) (%) (KrW Trillion) 2 Pension Market (LHS) MAS M/S (RHS) 3% 2% % growth 7% growth % Ins Bank Sec MAS Source: MAS Source: Company web sites Source: KSDA 18

19 VI LONG-TERM GROWTH STRATEGY I. Changing Market Environment II. Long-term Growth Drivers III. Investment Summary 19

20 I. Changing Market Environment Investors preference is shifting from bank deposit s to equity and from direct equity market to indirect investments. With upcoming regulatory changes, this trend is expected to accelerate Shift in Household Asset Growth Prospects (%) Installment funds 0 Bank Savings Equity FI Source: Korea Bank Regulatory Changes 1. Shift in Asset Class 2. Regulatory Changes Aging population Globalization Bank Securities Futures Derivatives, FX Etc. Asset Mgmt & Other Bank Integration Under CMISA Corporate Pension Variable insurance 2010 Insurance Insurance 20

21 II. Long-term Growth Drivers Goal USD 50 billion AUM by 2010 Financial Product Deposit Asset Shareholder Equity September end : KrW 39 tn tn (As of March end) Differentiate Asset Mgmt Consulting Growth Drivers 2. Strengthen Globalization 3. Expand IB Biz 4. Corporate Pension 21

22 III.Investment Summary Our strategy & track record - Chairman Park & CEO Choi (1 st gen. founder, knowledge/experience, dynamic mgmt. style, and youth) Positioning within the group Our key differentiation - Diversified revenue structure & focus on AM Biz = High Growth & Predictability & Profitability Growth Prospects - Asset Management (CMA, overseas equity fund & network) - Brokerage (Group Synergy & Hong Kong/Vietnam Operation) - Investment Banking (PI thru Hong Kong/Vietnam, China & India) - Corporate Pension (Differentiation) 22

23 Q & A THANK YOU For more information, please contact MIRAE_IR@miraeasset.com or visit 23

24 APPENDIX I. Income Statement II. Balance Sheet 24

25 I. Income Statement [KrW Million] Items 1H Q2 FY06 FY05 FY04 FY03 Operating Income 1,408, , , , , , ,905 A. Commissions Received 231, , , , , , ,033 1) Brokerage commission 99,137 53,073 46, , ,433 74,497 77,945 2) Underwriting commission 8,967 3,353 5,614 7,530 9,702 5,094 5,845 3) Brokerage Commission on beneficiary certificates 95,104 53,632 41,472 96,047 56,883 12,221 9,622 4) Commission from Wrap account & asset management 4,142 2,402 1,740 7,364 5,143 1, ) Others (Advisory, Strustured Product Sales & etc.) 23,963 14,595 9,368 38,975 19,915 12,633 11,271 B. Interest Income 92,583 48,878 43,705 74,526 48,796 19,184 21,844 C. Dividends Income 2,925 2, D. Distribution Income E. Gain on Sales of Trading Securities 58,215 40,207 18,008 45,433 45,806 36,088 23,347 F. Gain on Valuation of Trading Securities 54,781 27,112 27,669 9,624 1,422 1, G. Gain on Valuation of Deposits 17,480 8,997 8,483 23,300 18,384 12,705 14,479 H. Gain on Derivatives Transactions 108,801 72,178 36,623 72,558 83,180 96, ,836 I. Others (Gain & Valuation of Structured Products) 842, , , , Operating Expenses 1,205, , , , , , ,885 A. Other Operating Expenses 1,075, , , , , , ,199 B. G&A Expenses 130,683 71,108 59, , ,381 99, ,686 Net Revenue (Operating Profit + G&A Expenses) 333, , , , , , ,706 Operating Profit 202, ,953 94, , ,546 52,488 64,020 Net Profit (Before Tax) 208, ,073 93, , ,349 46,570 63,261 Net Income (After Tax) 150,806 82,987 67, ,987 91,527 31,261 43, Note: Current and historical numbers are based on pr-audit results provided for investors convenience.

26 II. Balance Sheet [KrW Million] Q2 Q4 FY06 Q3 FY06 Q2 FY06 Amount Portion Amount Portion Amount Portion Amount Portion Amount Portion G &A 71, % 59, % 49, % 41, % 41, % Salary & Compensation 42,258 59% 41,025 69% 30,476 61% 23,725 57% 23,336 56% Depreciation 2,112 3% 1,595 3% 1,431 3% 1,467 4% 1,438 4% Rental Expenses 2,817 4% 2,116 4% 1,676 3% 1,367 3% 1,253 3% IT Cost 2,256 3% 2,834 5% 1,673 3% 1,791 4% 1,725 4% Misc. Commissions 3,079 4% 1,894 3% 1,368 3% 1,925 5% 1,666 4% Advertising Expenses 3,710 5% 4,036 7% 5,775 12% 4,751 12% 6,696 16% Others 14,876 21% 6,075 10% 7,249 15% 6,391 15% 5,528 13% Items Q2 FY06 FY05 FY04 FY03 Total Assets 7,528,323 6,449,995 3,927,073 1,509, , ,979 Ⅰ. Current Assets 7,150,073 6,124,974 3,735,920 1,373, , ,121 Ⅱ. Fixed Assets 378, , , , , ,858 Total Liabilities 6,439,993 5,443,456 2,972, , , ,301 Ⅰ. Current Liabilities 6,439,993 5,442,654 2,970, , , ,623 Ⅱ. Long-term Liabilities ,632 1, Total Shareholder's Equity 1,088,330 1,006, , , , ,678 I. Stockholder's Equity 185, , , , , ,800 II. Capital Surplus 499, , , ,032 35,721 35,721 III. Retained Earnings 403, , , ,539 98,908 76,685 IⅤ. Capital Adjustment (301) (126) (98) (81) (1,887) (1,528) Total Liabilities & Stockholder's Equity 7,528,323 6,450,079 3,927,073 1,509, , , Note: Current and historical numbers are based on pr-audit results provided for investors convenience.