Despite North Korea Risk
Wan Hee Yoo, a Moody’s Vice President and Senior Credit Officer, said on September 25 that non-financial companies in South Korea are expected to maintain their credit ratings with stability although geopolitical tensions are escalating over North Korea’s ICBMs.
“The political tension between Seoul and Beijing is likely to negatively affect Lotte Shopping and South Korean automakers, but the effect is likely to be tolerable,” the vice president mentioned, adding, “The Hyundai Motor Group’s three subsidiaries in the automobile industry whose credit ratings have been evaluated by Moody’s are not expected to be immediately affected by the political conflict because they have sound financial structures.”
The vice president went on to say, “In the first half of this year, tech firms such as Samsung Electronics, LG Electronics and SK Hynix boosted their operating profits based on the boom in the memory chip and LCD panel industries, and their solid growth is likely to continue for a while.”
The vice president also commented that South Korean steelmakers’ financial leverage is likely to fall for the time being based on a gradual decline in borrowings and a gradual increase in EBITDA and that South Korean oil and petrochemical companies’ financial soundness, which improved a lot in 2015 and 2016, is unlikely to deteriorate in the near future.