Hyundai M&F fundamentals are improving, making the path to dividend resumption clearer

Overview

This report is Goldman Sachs' meeting takeaways on Hyundai M&F published after the Asia Financials Corporate Day held on June 23, 2026. The discussion focused on the underwriting cycle after weaker 1Q26 results, Korean insurance regulatory reform, revisions to CSM assumption guidance, Tier-1 capital improvement, and the potential path to dividend resumption.

Core views

The core view is positive: short-term revenue growth may remain moderate due to premium hikes and a strategy of prioritizing quality over scale, but underwriting profit is expected to improve over the next few quarters; reversal of FVPL losses should also help net profit recover. On the capital side, the Tier-1 ratio has already improved to 74.9%, and if the regulatory treatment allowing SVR to count toward Tier-1 from 2027E is implemented, capital adequacy and dividend-paying capacity will be further strengthened. The main constraints are that the CSM balance may be affected by updates to 2Q26E/4Q26E assumption guidance, and dividend resumption still requires regulatory easing.

Analysis framework

The report is based on management discussions at the corporate day, assessing fundamentals around underwriting profit, CSM, capital rules, and dividend-paying capacity, and supports its 12-month target price using a 1-year forward P/B and GGM framework. Goldman Sachs also supplemented standard disclosure frameworks such as GS Factor Profile, M&A Rank, and the Quantum database to explain its research and valuation background.

Methodology notes

• Valuation methodologyGGM/P/B valuation

  The 12-month target price of W47,000 is based on a 1-year forward target P/B of 0.64x, derived from the GGM formula [(ROE-g)/(COE-g)].

  This method maps return on equity, growth rate, and cost of equity into a reasonable P/B multiple, making it suitable for valuing financial stocks such as insurers.

• Factor profileGS Factor Profile

  Compares the stock with the market and industry peers across four dimensions: Growth, Financial Returns, Multiple, and Integrated.

  For financial stocks, Growth mainly references EPS and revenue growth, Financial Returns mainly references ROE, and Multiple mainly references P/E, P/B, and P/D.

• M&A frameworkM&A Rank

  Goldman Sachs uses a 1 to 3 scale to assess the likelihood of a company becoming an acquisition target, where 1 represents high probability and 3 represents low probability.

  If a company is rated 1 or 2, Goldman Sachs typically incorporates M&A factors into the target price; a rating of 3 is usually viewed as not material.

• Data platformQuantum

  Goldman Sachs' proprietary database providing financial statement history, forecasts, and ratios.

  The platform can be used for in-depth single-company analysis as well as cross-industry and cross-market comparisons.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Hyundai M&F (001450.KS)

  Research target; South Korean insurance stock; stock under Goldman Sachs coverage

  Strengths

  Expected improvement in underwriting profit, reversal of FVPL losses, higher Tier-1 ratio, potential benefit from SVR rule changes, and a path to dividend resumption.

  Weaknesses

  Revenue growth may be weak due to premium hikes and a quality-focused strategy, while the CSM balance may be affected by revisions to assumption guidance.

  Comparison

  The rating is assessed relative to Goldman Sachs' South Korea financials coverage universe, which includes banks, insurers, and financial platform companies.

  Risks

  Policy-driven pricing intervention, widening adverse variances, declining CSM quality, intensified competition in protection product sales, and delays in regulatory easing.

Key data

• Report date2026-06-24The report time was 9:19AM KST.
• Corporate day meeting date2026-06-23Goldman Sachs hosted Hyundai M&F management at the Asia Financials Corporate Day.
• Investment ratingBuyThe report disclosed a Buy rating.
• 12-month target priceW47,000Based on a 1-year forward target P/B of 0.64x.
• Reference price on disclosure pageW36,000Used to calculate price upside.
• Implied price upsideApproximately 30.6%Calculated from W36,000 to W47,000, excluding dividends.
• 1Q26 Tier-1 ratio74.9%Already close to the regulatory recommendation of around 80%.
• Recurring CSM growth expectation4%-5%However, revisions to assumption guidance in 2Q26E and 4Q26E may depress the year-end CSM balance.
• SVR capital impactApproximately +10 percentage pointsManagement expects that if SVR can be 100% included in Tier-1 from 2027E, it will improve the capital ratio.

Impact & implications

For investors, the investment case for Hyundai M&F is shifting from simply waiting for dividend resumption to fundamentals improvement driven jointly by recovery in underwriting earnings, improving capital ratios, and regulatory reform. If regulatory easing proceeds smoothly and improved SVR treatment helps turn distributable income positive, the stock's potential for dividend resumption and valuation recovery will strengthen; conversely, if CSM quality deteriorates, regulatory intervention intensifies, or sales competition heats up again, the target price and Buy view will come under pressure.

Risks

• Government intervention in policy pricing, compressing insurers' underwriting and pricing ability.
• Widening adverse experience variances or declining CSM quality, weakening profit sustainability.
• Renewed intensification of competition in protection product sales, similar to the competitive environment in 2017-2019.
• Greater pressure on the year-end CSM balance from assumption guidance revisions in 2Q26E and 4Q26E.
• Delays in regulatory easing or SVR rule adjustments, pushing back the timing of dividend resumption.

What to watch

• Whether insurance profit improves over the next few quarters as management expects.
• Seasonal changes in respiratory disease and auto insurance claims.
• Whether government restrictions on the price and frequency of managed treatment items such as manual therapy and shockwave therapy effectively reduce claims growth.
• The impact of assumption guidance updates related to the 2Q26E and 4Q26E Advanced Actuarial Oversight Plan on the CSM balance.
• Whether the cap on GA commissions eases competition and lowers insurers' expense burden.
• Whether the Tier-1 ratio can continue moving toward the regulatory recommendation of around 80%.
• Whether the regulatory treatment allowing SVR to count toward Tier-1 from 2027E is implemented, and whether it helps turn distributable income positive.
• The impact of changes in market interest rates on insurance liability size and capital ratios.