Mirae Asset Securities faces contrasting quarterly earnings forecasts driven by SpaceX equity valuation changes, according to analyst estimates released on July 22. Kim Hyun-soo of Sangsangin Securities projected Q2 consolidated net profit of 2.582 trillion won — a record high — followed by a Q3 net loss of 944 billion won. The volatility stems from Mirae Asset's approximately 400 billion won investment in SpaceX during 2022-2023, with the equity stake classified as FVPL (fair value through profit or loss) assets that reflect current-period gains or losses in net income. SpaceX went public on Nasdaq on June 12 at an IPO price of $135, with its valuation peaking at $2.25 trillion by end-June before declining to $1.58 trillion as of July 21, when shares traded at $123.54 — below the IPO price. South Korean securities regulations require quarterly recognition of fair value changes for FVPL-classified assets, directly impacting Mirae Asset's reported earnings.
Sangsangin Securities Projects Record Q2 Profit of 2.582 Trillion Won
Kim Hyun-soo stated in a July 22 report that Mirae Asset Securities' Q2 consolidated net profit would reach 2.582 trillion won, marking the company's highest quarterly earnings on record. This compares to 403 billion won in Q2 of the previous year — more than six times higher. The analyst attributed the surge to approximately 3 trillion won in additional valuation gains on Mirae Asset's SpaceX holdings. In Q1, Mirae Asset valued SpaceX at $800 billion and recognized approximately 600 billion won in valuation gains. Following SpaceX's June 12 IPO at a $1.75 trillion valuation, the company's stock price rose to a peak by end-June, pushing the valuation to $2.25 trillion. Kim estimated Mirae Asset's SpaceX stake value increased to 5.4 trillion won during this period. The analyst noted that the additional 3 trillion won valuation gain over the existing book value would be reflected in consolidated earnings, causing Q2 net profit to significantly exceed core business performance.
SpaceX Stock Price Decline from June Peak to Below IPO Level
SpaceX shares reversed course after reaching their end-June peak. As of July 21, the stock traded at $123.54 — below the $135 IPO price — with the company's valuation falling below $1.58 trillion. This decline directly reduces the value of Mirae Asset Securities' SpaceX holdings compared to Q2 levels. Kim Hyun-soo projected that Mirae Asset would record a consolidated net loss of 944 billion won in Q3, reflecting the valuation decrease. This contrasts with a net profit of 340 billion won in Q3 of the previous year. The analyst explained that price fluctuations in a single investment asset significantly influence Mirae Asset Securities' quarterly earnings and return on equity (ROE), which remains a discount factor.
Analysts Lower Target Prices Despite Upgrading Investment Ratings
Kim Hyun-soo reduced Mirae Asset Securities' target price from 88,000 won to 43,000 won while maintaining a neutral (hold) rating. Other securities firms issued similar forecasts. On July 16, Jang Young-im of SK Securities upgraded the investment rating from neutral to buy but lowered the target price from 69,000 won to 51,000 won. Jang noted that SpaceX shares are classified as FVPL financial assets, meaning valuation or disposal gains are recognized in current-period net income, which acted as a positive factor in the first half due to large valuation gains. However, considering current SpaceX stock price levels, Mirae Asset Securities could recognize valuation losses in the second half. On July 9, Kim Ji-won of Daol Investment & Securities also upgraded the rating from neutral to buy but lowered the target price from 73,000 won to 63,000 won. Kim stated that Mirae Asset's valuation gains likely increased to approximately 1.6 trillion won when SpaceX's IPO valuation rose, but the asset value of Mirae Asset's holdings could change based on SpaceX stock price movements following the IPO.
FAQ
What caused Mirae Asset Securities' record Q2 profit forecast?
Kim Hyun-soo of Sangsangin Securities projected Q2 consolidated net profit of 2.582 trillion won — a record high — driven by approximately 3 trillion won in additional valuation gains on Mirae Asset's SpaceX holdings. SpaceX's stock price rose from its June 12 IPO at $135 to a peak by end-June, increasing the company's valuation from $1.75 trillion to $2.25 trillion. Mirae Asset's SpaceX stake value reached an estimated 5.4 trillion won during this period.
Why did analysts lower target prices while upgrading Mirae Asset Securities' investment ratings?
Analysts upgraded ratings based on Q2's strong earnings but reduced target prices due to SpaceX's stock price decline. As of July 21, SpaceX traded at $123.54 — below the $135 IPO price — with valuation falling below $1.58 trillion. Kim Hyun-soo of Sangsangin Securities lowered the target price from 88,000 won to 43,000 won, Jang Young-im of SK Securities from 69,000 won to 51,000 won, and Kim Ji-won of Daol Investment & Securities from 73,000 won to 63,000 won.
How does SpaceX equity classification affect Mirae Asset Securities' earnings?
Mirae Asset's SpaceX holdings are classified as FVPL (fair value through profit or loss) financial assets. Under this accounting treatment, valuation gains or disposal gains are recognized in current-period net income. This caused large valuation gains to boost Q2 earnings when SpaceX's stock price rose, but the subsequent price decline is expected to result in valuation losses reflected in Q3 earnings.
