Five major South Korean securities firms—Mirae Asset Securities, Korea Financial Group, Samsung Securities, NH Investment & Securities, and Kiwoom Securities—are projected to achieve record Q2 earnings, with combined operating profit consensus reaching 5.1278 trillion won. The surge follows explosive trading volumes driven by the KOSPI breaking 9000 on June 18 and the late-May launch of single-stock leveraged ETFs, which pushed Q2 daily average trading to approximately 118 trillion won, up 39.8% from Q1. Brokerage fee income, ETF liquidity provider (LP) revenue, and equity valuation gains—including Mirae Asset's estimated 1.5 trillion won from SpaceX holdings—fueled the performance.
NH Investment Achieves Record First-Half Net Income of 965.2 Billion Won
NH Investment & Securities recorded first-half net income of 965.2 billion won on a parent company basis, up 107.6% year-over-year, marking a record for the half-year period. Growth across brokerage, financial products, and investment banking divisions drove the result.
Mirae Asset Projects Industry-First 2 Trillion Won Operating Profit
Mirae Asset Securities is positioned to become the first Korean brokerage to reach 2 trillion won in quarterly operating profit, driven by valuation gains from its pre-IPO investment in SpaceX. Shinhan Investment & Securities estimated Mirae Asset's Q2 SpaceX-related profit at approximately 1.5 trillion won. SpaceX share prices have since fallen below the offering price in Q3, introducing potential valuation volatility.
Korea Financial Group Expected to Surpass 1 Trillion Won Operating Profit
Korea Financial Group is forecast to post operating profit of 1.0415 trillion won, up 77.9% year-over-year, crossing the 1 trillion won threshold. Aggressive expansion in leveraged ETF market share and competitive strength in commercial paper issuance using equity capital supported the performance.
Kiwoom and Samsung Securities Benefit Most from Trading Volume Growth
Kiwoom Securities and Samsung Securities are identified as the primary beneficiaries of increased trading volumes. Kiwoom is expected to expand market share through KOSDAQ market reforms and retirement pension business growth, given its high retail investor concentration. Samsung Securities is projected to sustain retail competitiveness through active KOSPI-focused stock trading and retirement pension expansion.
Single-Stock Leveraged ETFs Drive Q2 Trading Volume Surge
The late-May launch of single-stock leveraged ETFs acted as a catalyst for trading volume growth. Daily average trading volume reached approximately 137.5 trillion won in June. ETF share of total Korea Exchange trading volume expanded from 40% in Q1 to 49% in Q2. Investor appetite persisted after the government announced regulatory tightening measures. Total trading volume for Samsung Electronics and SK Hynix single-stock leveraged ETFs maintained the 12 trillion won level, rising from 12.1674 trillion won on the 16th (before the regulatory announcement) to 12.2466 trillion won on the 20th (first trading day post-announcement).
Analysts Cite ETF LP Revenue and Brokerage Fees as Key Drivers
An Young-joon, researcher at Kiwoom Securities, stated, "Earnings surprises from strong trading volumes are fully predictable. Q2 is expected to see a surge in ETF LP revenue following the listing of leveraged ETFs." Ko Yeon-su, researcher at Hana Securities, noted, "Despite the impact of surging short-term bond rates, expanded contributions from equity valuation gains and ETF LP operating income are expected to offset bond valuation losses."
H2 Outlook Hinges on Sustained Trading Volume Levels
Analysts identify trading volume momentum as the primary variable for H2 performance. Cho A-hae, researcher at Meritz Securities, stated, "Concerns about peak trading volumes exist, but ongoing market reforms—including KOSDAQ revisions and anti-stock manipulation laws—and continued money flows into equities, combined with structurally expanded brokerage profits from elevated absolute trading volumes, merit attention." Seol Yong-jin, researcher at iM Securities, added, "Uncertainty remains over whether current elevated trading volumes will persist and whether brokerage sector profits will be sustained if volumes contract. However, similar to the post-COVID period when sharply expanded volumes subsequently declined but remained significantly higher than pre-pandemic levels, absolute trading volumes are likely to stay above previous benchmarks even if they contract."
FAQ
What did South Korean securities firms achieve in Q2?
Five major South Korean securities firms—Mirae Asset Securities, Korea Financial Group, Samsung Securities, NH Investment & Securities, and Kiwoom Securities—are projected to achieve record Q2 earnings, with combined operating profit consensus reaching 5.1278 trillion won, driven by explosive trading volumes and ETF liquidity provider revenue.
Why did Korean stocks trading volumes surge in Q2?
Q2 daily average trading volumes reached approximately 118 trillion won, up 39.8% from Q1, following the KOSPI breaking 9000 on June 18 and the late-May launch of single-stock leveraged ETFs, which pushed June daily averages to approximately 137.5 trillion won.
How did single-stock leveraged ETFs impact brokerage earnings?
The late-May launch of single-stock leveraged ETFs expanded ETF share of total Korea Exchange trading volume from 40% in Q1 to 49% in Q2, generating increased brokerage fee income and ETF liquidity provider (LP) revenue for securities firms, according to analysts at Kiwoom Securities and Hana Securities.
