Is KB's EPS growth sustainable in 2023?

KB's EPS growth in 2023 appears to be challenging to sustain based on the following points: 1. **Decline in Revenue Growth Rate**: KB experienced a significant decline in revenue growth rate, with a year-over-year decrease of 30.63% in revenue in the fourth quarter of 2024 compared to the previous quarter. This decline in revenue could negatively impact EPS growth, as a lower revenue base would need to support the same level of earnings per share. |code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|Diluted EPS YoY|market_code| |---|---|---|---|---|---|---|---| |KB|KB.N|Kb Financial Group|2024 Q1|-31.863618888611573|0.5890631187920607|-32.35089270820855|169| |KB|KB.N|Kb Financial Group|2024 Q2|8.840487223071104|-4.67762494221157|13.431889973003841|169| |KB|KB.N|Kb Financial Group|2024 Q3|22.35294176700364|21.629696865694328|24.476581945438337|169| |KB|KB.N|Kb Financial Group|2024 Q4|230.10029318907596|-30.627881550119675||169| 2. **Net Income Growth Rate**: Although KB's net income grew by 230.1% year-over-year in the fourth quarter of 2024 compared to the same period in the previous year, this growth rate is based on a previous year's low income figures. Without a sustained increase in revenue or a consistent decrease in expenses, such high growth rates are difficult to maintain over an extended period. 3. **Interest Coverage Ratio**: KB's interest coverage ratio, which measures the company's ability to pay interest on its debt, is relatively low at 1.62. A lower interest coverage ratio indicates that a larger portion of earnings is being used to service debt, potentially leaving less room for EPS growth. |code|Ticker|Name|Date|ROE(Average)|market_code| |---|---|---|---|---|---| |KB|KB.N|Kb Financial Group|2024 Q1|1.8434|169| |KB|KB.N|Kb Financial Group|2024 Q2|4.8862|169| |KB|KB.N|Kb Financial Group|2024 Q3|7.6679|169| |KB|KB.N|Kb Financial Group|2024 Q4|8.8639|169| 4. **Strategic Focus**: KB's strategic focus on share buybacks and optimizing capital structure may not directly contribute to EPS growth if not accompanied by similar improvements in revenue or operational efficiency. Share buybacks can reduce the number of shares outstanding, which may increase EPS in the short term, but sustained growth requires underlying earnings power. 5. **Market Conditions**: The financial market conditions, including global economic uncertainties and heightened concerns over delinquency and NPL ratios, have posed challenges for KB and the broader financial sector. These factors can impact revenue and earnings growth, making it difficult to sustain EPS growth in a volatile environment. In conclusion, while KB has shown a significant net income growth in 2024, the sustainability of this growth in 2023 is uncertain due to the decline in revenue growth rate, the challenges in maintaining profitability amidst revenue growth, and the broader economic uncertainties.