Contrasting Titans: Meritz Securities' Q2 Profit Decline vs. Mirae Asset Securities' 83.1% Surge in South Korea's Evolving Financial Landscape

In the dynamic world of South Korean securities, two giants—Meritz Securities and Mirae Asset Securities—have charted divergent paths in Q2 2025. While Meritz grapples with a 13% year-over-year decline in operating profit to 300.4 billion won, Mirae Asset has surged ahead with an 83.1% jump in operating profit to 540 billion won. This stark contrast reveals critical insights into strategic positioning, innovation, and global market exposure.

Meritz Securities: Stability Amid Domestic Constraints

Meritz's Q2 net profit of 256.1 billion won—a 30th consecutive quarter above 100 billion won—underscores its resilience. However, its operating profit decline reflects a reliance on domestic markets and a lack of diversification. Meritz's strength lies in its disciplined shareholder return policy, including consistent buybacks and cancellations, which earned it a target price upgrade to ₩145,000 from Mirae Asset. Yet, this focus on domestic insurance and securities operations has left it vulnerable to local market volatility.

Meritz's non-life insurance segment maintained steady performance, but its securities division faced headwinds from falling trading gains and a challenging interest rate environment. The company's Homeplus bond holdings, though reserved for, highlight its risk-averse approach. While this strategy ensures short-term stability, it lacks the scalability of global expansion.

Mirae Asset Securities: A Global ETF Powerhouse

Mirae Asset's Q2 success stems from its aggressive internationalization and digital innovation. Its overseas subsidiaries contributed 26% of first-half pre-tax income, driven by a 106.1 billion won profit in Q2 alone. The company's ETF business in the U.S., Hong Kong, and Europe more than doubled in revenue compared to 2024, capitalizing on global demand for passive investing.

Mirae Asset's strategic pivot to wealth management and digital assets has also paid dividends. Customer assets hit a record 533 trillion won, with robo-advisor assets rising 1.2 trillion won to 3.3 trillion. The firm is developing an all-in-one platform to integrate traditional and digital assets, positioning itself at the forefront of the crypto-asset revolution. Additionally, its Indian subsidiary, Sharekhan, is transitioning from a brokerage model to a comprehensive wealth management firm, unlocking new revenue streams.

Strategic Differentiators: Global vs. Domestic Focus

The key divergence lies in market exposure. Meritz's domestic-centric model contrasts sharply with Mirae Asset's global ETF dominance. While Meritz's P/B ratio of 2.28x reflects its strong shareholder returns, Mirae Asset's 10.9% ROE and 71% year-over-year profit growth highlight superior capital efficiency.

Mirae Asset's ability to adapt to regulatory shifts—such as its proactive digital asset strategy—further cements its edge. The company is also preparing to expand flow trading in the U.S., a move that could amplify its ETF-driven growth. Meanwhile, Meritz's reliance on policy-driven insurance sector rallies (e.g., mandatory share cancellations) exposes it to regulatory uncertainty.

Investment Implications

For investors, the choice between Meritz and Mirae Asset hinges on risk appetite. Meritz offers defensive appeal with its consistent dividends and transparent governance, ideal for conservative portfolios. However, Mirae Asset's 83.1% operating profit surge and global ETF exposure make it a compelling growth play.

Conclusion: Navigating the Future of Korean Securities

As South Korea's financial sector evolves, firms must balance stability with innovation. Meritz's disciplined approach ensures resilience, but Mirae Asset's global ETF strategy and digital transformation position it as a leader in the next era of securities. For investors seeking long-term growth, Mirae Asset's 10.9% ROE and expanding international footprint warrant serious consideration. In a market where adaptability is key, the latter's forward-looking strategy may prove the more rewarding bet.