Hyundai Motor Securities, the brokerage arm under South Korea’s Hyundai Motor Group, has joined the 1 trillion won ($860 million) market value club thanks to record earnings and redeemable share issues on the back of its promising corporate outlook.

The brokerage firm’s equity capital stretched to 1.03 trillion won by June after it finished the first half with all-time high earnings and sold redeemable convertible preference shares worth 103.6 billion won.

Its net capital ratio also jumped to 502.89 percent from 453.6 percent a year ago. Annualized return on equity, a measure of profitability in relation to equity, was 10.53 percent as of end-June, among the highest in the industry.

Increased equity capital has made management of contingent liability easier. As of end-June, its share of contingent liability over total equity capital was 70.44 percent, held steady at 70 percent since the first quarter of 2019.

Analysts are projecting a credit rating bump for Hyundai Motor Securities. The threshold for securities firms to qualify for a ratings upgrade is 1 trillion won. In August, NICE Credit Information Service notched up its long-term credit rating of Hyundai Motor Securities from “A+ with a stable outlook” to “A+ with a positive outlook,” raising the prospects for an upgrade from other agencies.

Hyundai Motor Securities has been on an impressive earnings streak. In its financial report released last month, operating profit on a consolidated basis reached 74 billion won in the January-June period, up 6.5 percent from its previous record high a year earlier. Net profit of its retail business was 39.4 billion won, up 56 percent on year. Its IB business raked in a net profit of 42.9 billion won.

When breaking down its net profit share by division, retail accounted for 26.3 percent, bonds 22.2 percent, IB 28.6 percent and PI 15.5 percent.

Its shares fell 0.49 percent Monday to 10,100 won apiece.

By Hong Hae-jin and Kim Hyo-jin

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