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JONBUR Research · Initiation

Lotte Non-Life Insurance · 000400 · Insurance

Lotte Non-Life Insurance: Shares Up 32.1% Over a Year as Acquisition News Meets Thin Earnings

Why this report

Start of coverage: written when a reader opened this company and there was no report yet.

Lotte Non-Life Insurance closed at ₩2,525 on 2026-10-21, up 21.7% in one month and 32.1% over one year, after news reports on 2026-10-13 of an acquisition by Shinhan Financial Group. Filed numbers show a trailing operating loss of ₩21.9B and net income of ₩16.5B, with leverage high at 1,272.6% liabilities to equity.

Written Oct 22, 2026 · Data as of Oct 21, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

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Thesis

The data supports a story driven by corporate events more than by earnings. Headlines from Edaily, Etoday, Yonhap and Maeil Business Newspaper on 2026-10-13 say Shinhan Financial will invest about ₩700B (₩693.3B in one report) and reach a 77% stake. A filing the same day was titled major management matter relevant to investors, and two 5%+ holding reports followed on 2026-10-19 and 2026-10-20. The details of the deal are not in the data beyond the headlines, so terms and timing cannot be confirmed here. One headline notes the deal is still a question mark and that an additional capital increase is possible.

Earnings do not yet explain the price move. Trailing ROE is 1.8% against 7.3% in 2025 and 24.0% in 2023. Trailing P/E is 47.6x, which reflects small profits. Foreign ownership rose from 0.8% to 1.6% over 60 days, and over 20 days foreigners and institutions were net buyers while retail investors were net sellers.

Business overview

Lotte Non-Life Insurance (롯데손해보험) is a non-life insurer in the Insurance sector, founded on 1946-05-20 and listed on KOSPI since 1971-04-16. It has 310,336,320 listed shares and a market capitalisation of about ₩783.6B. The CEO is listed as 이은호. Revenue figures are not available in the data. Operating income was ₩396.3B in 2023, ₩31.1B in 2024 and ₩64.7B in 2025, so earnings have been volatile. Several filings in 2026 were responses to rumour or news reports, and there was an exchange inquiry about a news report or price move on 2026-09-11.

Financial analysis

These figures come from filed financial statements. Revenue and margins are not available. Net income was ₩301.6B in 2023, ₩24.2M-scale growth aside, ₩24.2B in 2024 and ₩51.3B in 2025. Operating income for the trailing period to H1 2026 was a loss of ₩21.9B, while net income was ₩16.5B. ROE fell from 24.0% in 2023 to 2.4% in 2024, rose to 7.3% in 2025, and is 1.8% on a trailing basis.

The balance sheet is highly leveraged, with liabilities at 1,272.6% of equity. Cash is ₩579.3B and borrowings are ₩807.0B. Trailing free cash flow is negative ₩564.0B. Dividend yield is 0.0%.

Valuation

The share price implies a P/B of 0.8x, close to year-end readings of 0.9x in 2025 and 0.8x in 2024, and above 0.6x in 2023. Trailing P/E is 47.6x versus 10.5x at the end of 2025 and 25.8x at the end of 2024. EV/EBITDA is 67.5x. Among listed peers, P/B ranges from 0.2x (Hanwha Life) to 0.9x (DB Insurance), and P/E from 3.1x (Hyundai Marine & Fire) to 17.5x (Samsung Life). Lotte Non-Life's P/E is well above all of these.

The valuation model uses the excess method (P/B versus ROE) at a 9.7% rate on trailing data to H1 2026. It gives a model estimate based on the assumptions shown of ₩3,849 per share in the base case, ₩2,664 in the bear case and ₩5,390 in the bull case. The current price of ₩2,525 is below all three, and the 52-week range is ₩1,576 to ₩3,280. This is not a target or a reason to act, and the result depends heavily on the ROE assumption, which has been unstable.

Catalysts

  • Shinhan Financial's reported ₩700B acquisition, with a stake of 77% according to Yonhap, is the main event in the recent data.
  • The 5%+ holding reports filed on 2026-10-19 and 2026-10-20 may show how ownership is changing.
  • A possible additional capital increase, mentioned in an Edaily headline, could affect the balance sheet and share count.
  • Foreign and institutional net buying over the last 20 days, with foreign ownership at 1.6%, shows active interest from those groups.
  • The next periodic report after the H1 2026 report will show whether the trailing operating loss narrows.

Risks

  • Trailing operating income is a loss of ₩21.9B and ROE is 1.8%, so earnings support for the price is weak.
  • Liabilities are 1,272.6% of equity and trailing free cash flow is negative ₩564.0B.
  • Much of the recent rise depends on news of an acquisition whose terms and completion are not confirmed in the data, and one headline calls it a question mark.
  • A capital increase could dilute existing shareholders, and no dividend is currently paid.
  • Earnings have swung sharply from year to year, with operating income of ₩396.3B in 2023 and ₩31.1B in 2024, which makes model estimates less reliable.

Closing view

The data shows a stock re-rated on acquisition news rather than on improving results. The price sits below the model's bear-case estimate of ₩2,664 only by a small margin, but that estimate rests on assumptions that recent earnings have not confirmed. Weak trailing profit, negative free cash flow and high leverage argue for caution, while a possible new owner and rising foreign ownership are the main supportive points. Deal details and later filings will matter most, and nothing here is a recommendation.

Model estimate of fair value

Bear
₩2,664
+13%
Base
₩3,849
+63%
Bull
₩5,390
+128%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the P/B vs ROE (excess return) model on the stock's Valuation tab (statements TTM to H1 2026; discount rate 9.7%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 22, 2026InitiationStart of coverage (reader request)Lotte Non-Life Insurance: Shares Up 32.1% Over a Year as Acquisition News Meets Thin Earnings

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information