Hanyang Securities shares fell nearly 12% in early trading as concerns about credit exposure to Central Group affiliates emerged.
According to the Korea Exchange, as of 9:31 a.m., Hanyang Securities was trading at 20,000 won, down 2,700 won (11.89%) from the previous trading day.
Analysts suggest that the exposure related to affiliates of the Central Group, which has filed for rehabilitation, exceeds the company's earnings, dampening investor sentiment.
Yoon Yoon-ki, a senior analyst at Korea Credit Rating, stated, "Hanyang Securities' exposure to Central Group amounts to 84 billion won, surpassing last year's annual operating profit of 75.3 billion won. If this is recognized as a total loss, it could significantly burden current earnings, making a shift to operating losses likely."
Hanyang Securities has secured collateral related to future receivables from JTBC and Central Group's subsidiaries, as well as deposits for Olympic broadcasting rights. However, Korea Credit Rating noted uncertainties regarding the actual effectiveness and recoverability of the collateral during the rehabilitation process.
The value of future receivables may fluctuate based on the borrower's business conditions, necessitating further assessment. Nonetheless, it was evaluated that even if the recovery of Hanyang Securities' exposure is delayed, the immediate liquidity burden would be limited.
Additionally, given that the exposure related to Central Group is not large compared to the capital of the financial sector, the likelihood of this issue spreading into systemic risk across the financial industry is considered low.
* This article has been translated by AI.
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