[Alpha Biz= Reporter Kim Sangjin] Korea Ratings announced on October 22 that it has downgraded Daol Investment Securities' corporate credit rating from A (negative) to A- (stable). The credit ratings for the company's commercial paper and electronic short-term bonds were also lowered from A2 to A2-.

The downgrade was attributed primarily to a decline in market share and profitability for Daol Investment Securities. The company's operating net profit decreased from 202.2 billion KRW in 2022 to 160.8 billion KRW in 2023, with only 60.3 billion KRW reported in the first half of this year. During the same period, its market share fell from 1.1% to 0.8%, and then to 0.5%.

Korea Ratings stated, "Daol Investment Securities is strengthening its sales and trading (S&T), bond management, and corporate finance to expand its revenue base. However, it is expected to be difficult to improve market dominance in the short term."

Additionally, Korea Ratings evaluated that the capital adequacy and soundness indicators of Daol Investment Securities have also deteriorated, significantly impacted by the sluggish real estate market. The burden of real estate project financing (PF) continues to be a concern. As of the end of June this year, Daol Investment Securities' real estate PF exposure amounted to 445.3 billion KRW, accounting for 62.3% of its equity capital.

 

 

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