How Meritz Chair Cho Jung-ho became Korea's No. 2 stock rich

Driven by chair’s bold leadership, Meritz’s aggressive shareholder returns fuel stock surge

Meritz Financial Group Chair Cho Jung-ho (Meritz Financial Group)

Meritz may not be the first company to come to mind when thinking of Korea's wealthiest stock owners. Yet, Meritz Financial Group Chairman Cho Jung-ho recently ascended to become the country’s second-richest stock owner after Samsung Group Chairman Lee Jae-yong.

This report surfaced after Meritz stocks hit a record 125,000 won ($85.6) on Feb. 21, placing Cho’s stock holdings at approximately 12.2 trillion won — second only to the nation's largest conglomerate Samsung Group Chairman Lee, whose stock holdings are valued at around 13 trillion won.

With Meritz’s stock continuing to climb rapidly, industry watchers speculate that Cho could soon surpass Lee.

As of Friday, Meritz’s market capitalization stood at around 23 trillion won, with its stock priced at 120,800 won per share. This marks a nearly 17-fold increase compared to five years ago when Meritz was valued at just 1.43 trillion won.

Meritz, led by its insurance subsidiary Meritz Fire & Marine Insurance, has become the first non-banking financial conglomerate to break into the top tier list, which has been dominated by financial holding conglomerates backed by their strong banking units.

The company now ranks third among all financial stocks, following KB Financial Group and Shinhan Financial Group. On Monday, when its stock hit 125,000 won, Meritz briefly surpassed Shinhan Financial Group to claim the second spot.

While stock value gains are not unique to Meritz, with the four major financial giants seeing an average gain of 30 percent in 2024, Meritz has had led the charge in value growth, driven by a distinct strategy under Cho's leadership.

In November 2022, Cho made enhancing shareholder returns the company’s top priority, unveiling a three-year plan. The strategy aimed to maintain a return rate of over 50 percent of annual net profit from 2023 to 2025, a target Meritz has met for the past two years. The shareholder return rate reached 53.1 percent in 2024, up from 51.2 percent in 2023.

To achieve this goal, Cho launched the "One Meritz" initiative and overhauled the corporate structure. In February 2023, the group delisted Meritz Fire and Meritz Securities, streamlining the holdings group's presence in the market.

Cho also made bold moves to demonstrate his commitment to shareholders.

In announcing the plans, he emphasized the principle that "the value of one share held by a major shareholder is equal to the value of one share held by a common shareholder." He also publicly stated that he had no intention of a management succession, and prioritized maximizing shareholder returns, even at the expense of his own ownership stake.

Following the incorporation of subsidiaries in 2023, his shareholding in the group fell from about 76 percent to below 50 percent.

With earnings steadily rising, the industry expects Meritz stock to maintain its upward momentum. In 2024, Meritz Financial Group posted a record net profit of 2.33 trillion won, up nearly 10 percent on-year, after surpassing the 2 trillion won milestone for the first time in 2023. The growth was largely driven by Meritz Fire, which achieved its fifth consecutive year of record net profit, reaching 1.7 trillion won last year.

Local securities firms have raised their target price for Meritz stock following its earnings disclosure, with some projecting as high as 150,000 won.

However, industry watchers note Meritz could strengthen its position by improving its business fundamentals, particularly by reducing its reliance on Meritz Fire, which accounted for over 70 percent of the group’s net profit last year.