Meritz Financial Group: Steady Profits and High Returns, With Heavy Leverage and Negative Free Cash Flow

Thesis

The data supports a picture of consistently profitable operations. Net income rose from ₩2.0T in 2023 to ₩2.3T in 2024 and 2025, and ROE has stayed between 21.3% and 23.4%. The share price is up 10.9% over three months and 16.5% over one year, and it sits below its 52-week high of ₩149,800 and above its low of ₩98,000.

The data also shows limits. Liabilities to equity is 1,061.5%, trailing free cash flow is negative ₩3.3T, and the dividend yield is shown as 0.0%. Revenue, margins and borrowings for the trailing period are not available. Investor flows, foreign ownership, short balance and news headlines are also not available, so market positioning cannot be assessed.

Business overview

Meritz Financial Group is listed on the KOSPI in the holding companies sector. It was founded on 2011-03-28 and listed on 2011-05-13, with 175,221,773 listed shares. The CEO is listed as 김용범. The close on 2026-10-12 was ₩129,800, giving a market capitalization of ₩22.7T and an enterprise value of ₩19.0T. The data gives no description of its subsidiaries or business lines, so this report does not describe them.

Financial analysis

These figures come from filed financial statements (DART). Revenue was ₩58.6T in 2023 and ₩46.6T in 2024, a decline of 20.5%. The 2025 and trailing revenue figures are not available. Operating income was ₩2.9T in 2023, ₩3.2T in 2024 and ₩2.9T in 2025, and it was ₩3.0T on a trailing basis through H1 2026. Net income was ₩2.0T in 2023, ₩2.3T in 2024, ₩2.3T in 2025 and ₩2.4T trailing.

Operating margin was 5.0% in 2023 and 6.8% in 2024. ROE was 21.3% in 2023, 23.4% in 2024, and 22.5% in both 2025 and the trailing period. Cash was ₩3.7T at H1 2026. Liabilities to equity was 1,061.5%, which indicates a highly leveraged balance sheet. Trailing free cash flow was negative ₩3.3T.

Valuation

The current price to earnings ratio is 9.4 and price to book is 2.0. EV/EBITDA is 6.1. At the end of 2025 the ratios were 8.6 times earnings and 1.9 times book, so both are slightly higher now. Year-end multiples for earlier years are not available.

Among the listed peers, KB Financial Group trades at 9.9 times earnings and 1.0 times book, Shinhan Financial Group at 9.1 and 0.8, and Hana Financial Group at 8.6 and 0.8. SK Square is at 4.0 and 2.4, and SK is at 4.9 and 1.1. Meritz's price to book of 2.0 is above the three financial peers, which fits with its higher ROE of 22.5%, though the data does not give peer ROE. Dividend yield is 0.0%.

Catalysts

• A corporate value-up plan was filed on 2026-08-12, which may signal shareholder return or valuation initiatives, although details are not in the data.
• A half-year report for June 2026 was filed on 2026-08-14 and shows trailing net income of ₩2.4T.
• On 2026-08-28 filings showed a buyback trust contract being signed alongside the termination of a prior treasury share trust contract.
• A Material Matters Report on 2026-09-21 covered a decision to issue debt securities recognized as capital, which bears on capital structure.
• Filings on 2026-09-04 covered a change in the largest shareholder's holdings and a 5%+ holding report, and insider shareholding reports followed on 2026-09-30.

Risks

• Liabilities to equity of 1,061.5% leaves the balance sheet highly leveraged.
• Trailing free cash flow of negative ₩3.3T shows cash being consumed rather than generated.
• Revenue fell 20.5% in 2024, and revenue for 2025 and the trailing period is not available to confirm a recovery.
• Operating income dipped from ₩3.2T in 2024 to ₩2.9T in 2025, so profit growth has not been uniform.
• Investor flows, foreign ownership, short interest and news are not available, which leaves gaps in assessing sentiment.

Closing view

The filed numbers show stable, high returns on equity of around 22% to 23% and net income of about ₩2.3T to ₩2.4T. These sit alongside a very leveraged balance sheet, negative free cash flow and a price to book above that of the listed financial peers. Recent filings point to active capital management, including buybacks, a value-up plan and capital-type debt issuance. Missing revenue, flow and short interest data limit the analysis, so this report offers no recommendation and leaves interpretation to the reader.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Report history

1. Oct 13, 2026InitiationMeritz Financial Group: Steady Profits and High Returns, With Heavy Leverage and Negative Free Cash Flow