HANA Daetoo Securities Co. Ltd (HDSC) has generated substantially improved profits during the first quarter of fiscal year 2009; for example, net profit surged approximately 37% from 56.7 billion won in the last quarter of 2008 to 77.7 billion won in June 2009. Notably, HDSC has shown return on equity (ROE) greater than 20% in 2009, the highest rate of return in the industry; thus, net profit in 2009 is expected to soar to 300 billion won, far exceeding the management’s goals.
Since its merger with Hana IB Securities Co. Ltd in December 2008, the total assets of HDSC have consistently rose, and will exceed the target amount of 4 trillion won by the end of this year. Furthermore, for the first time within the industry, HDSC issued a Surprise CMA with an earning rate of up to 4.5% in May, and expects the CMA balance to be over 40 trillion won by the end of 2009.
Since the inauguration of CEO Kim Jiwan in February 2008, HDSC has concentrated on securities sales and trade. With brand-new services of “Feegalow,” an online account for stock trading, and a mentor system, an online investment consulting service, HDSC has witnessed a substantial increase in securities sales and trading. As such, its market share of securities trading fees in Korea has increased substantially from 1.8% in early 2008 to 3.5% in the first half of 2009, and is expected to reach 4% by the end of the year.
The primary goal of HDSC is to become the leading company in the cash management industry. To achieve this goal, HDSC plans to build the market power of the industry via an increase in customers’ assets in order to reinforce the management of key (institutional) customers domestically and internationally, as well as develop customer loyalty programs. The ultimate goal of HDSC is thus to become the world’s leading global financial investment company.
HDSC has recently developed the following strategic products and services in order to cope with rapid market changes.
*Mentors Services (December 2008):This is an asset management service that is designed to provide timely and accurate information to online investors through an online live broadcast, an exclusive Web page, and HTS and news texting services. This service also offers consultation on individual portfolio and investment strategies to registered customers through a self-appointed mentor. With a substantial increase in registered customers (10,000 as of August 2009) within a relatively short period of time, this service has proved very successful.
*Increasing Market Share of Securities trading fees: HDSC’s share of the stock market has risen consistently to 3.6% in the second quarter of 2009, with an emphasis on securities sales and trade formed by new CEO Kim Ji-wan.
*New CMA, Surprise (May 2009): The Surprise CMA issued by HDSC in May entered the spotlight due mainly to it having an industry record high earning rate of 4.5%. As of July 2009, for example, among the daily average increase of 10,735 CMA accounts, HDSC climbed to the highest level of 28.6% (3,065 CMA accounts) in the industry. As of August 2009, therefore, the CMA balance reached 2.76 trillion won with 260,000 accounts.
*Hana UBS 120/20 Fund (September 2009): Since September 2009, “Hana UBS 120/20 Fund” has been on the market for the first time in the industry. The equity fund operated by Hana USB Asset Management employs an equity long-short strategy, used primarily by hedge funds, that involves taking long positions in stocks (20% of total assets) that are expected to increase in value and short positions in stocks that are expected to decrease in value (20% of total assets).