Oh Ik-geun, CEO of Daishin Securities, "Overcoming Crisis with No.1 DNA... Dividends as Planned" [Asia Exclusive Interview]

Interview with Oh Ik-geun, CEO of Daishin Securities
Overcoming Stock Market Crisis with 'No.1 DNA'
Establishing Foundation to Achieve KRW 10 Trillion in Equity Capital
Continuing Dividend Policy Plans Without Changes

Oh Ik-geun, CEO of Daishin Securities, is being interviewed on the 6th at Daishin 343 Building in Jung-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporters Jeon Pil-su and Hwang Jun-ho] Daishin Securities has celebrated its 60th anniversary. Starting as Samrak Securities, it has overcome numerous hardships such as the Asian financial crisis and the global financial crisis, surviving as the only one among the former five major securities firms including Daewoo, Dongseo, Ssangyong, and LG. On the 20th of last month, Daishin Securities reflected on its 60-year history and completed preparations to write the ‘100-Year Daishin Securities History.’ In a recent interview with Asia Economy, CEO Oh Ik-geun explained the missions and goals established so far. Meeting CEO Oh at Daishin343 in Myeongdong, Seoul, he emphasized the ‘No.1 DNA’ and stated, “We will contribute to realizing the group’s mission of ‘try Agile ways, create The Value’ and building a 100-year company.”

What did you say to the employees on the 60th anniversary?

▲ I emphasized the ‘No.1 DNA’ a lot. We led the market by being the first to introduce HTS (Home Trading System), and our IB side was also strong. We were the absolute leader. However, we completely lost that position later. At that time, I thought about the No.1 DNA. It is said that animals that have disappeared can be restored through DNA, so there is no reason why a business cannot be revived. Currently, we have risen to the top tier in IPOs. At the end of last year, we were selected as the ‘2021 KOSDAQ Excellent IB’ by the exchange, an award usually given only to about two large securities firms. The market accepted our role as a ‘solution provider’ that fulfills all the needs of companies. I also emphasize the No.1 DNA to departments with poor performance. Confidence is important, so I tell them to boldly take on challenges.

You changed the group name and set a new mission. Please explain the plan to achieve KRW 10 trillion in equity capital.

▲ ‘Agile ways’ means not being bound by the past but responding flexibly and quickly to the rapidly changing financial environment to achieve continuous growth. It also reflects our determination to boldly challenge businesses that Daishin can excel in, based on securities and finance. ‘The Value’ stands for trust, mutual growth, and expertise, which can be seen as the direction Daishin Financial Group should pursue. We plan to engage in corporate activities of ‘mutual growth’ where customers, employees, and society can develop together, create growth aimed by the group through the ‘expertise’ of our members, and grow into a ‘trusted’ company. Daishin will strengthen competitiveness in finance and real estate sectors and expand global investments and business. Through this, we aim to achieve KRW 10 trillion in equity capital.

With the stock market plunging this year, it seems difficult to defend earnings.

▲ We achieved record-high earnings last year. However, this year is very challenging. Domestic and international inflationary pressures are expanding, and stagflation is becoming a reality. It is a time when risk management is necessary. Under a stable financial structure and risk management, Daishin Securities is further strengthening competitive sectors and increasing investments in high-growth sectors, pursuing a unique growth strategy of ‘growth within stability.’ We reduced the brokerage portion, which is highly sensitive to market conditions, and increased the shares of IB and WM to create a business model with high growth and profitability. By expanding the IB organization, we have taken on large IPO deals such as LG Energy Solution and Kakao Pay, standing shoulder to shoulder with large securities firms’ IB. To respond to the increasing demand for asset management in the low-interest, low-growth era, we have also strengthened the WM business. In alternative investment products such as REITs, we have set industry-leading models as mid- to long-term tasks. We plan to grow as the ‘No.1 REITs specialized house’ trusted by providing differentiated WM solutions with unrivaled expertise in REITs and real estate alternative investments.

I heard that ‘Daishin Global Core REITs’ will be listed soon.

▲ We are about to apply for business approval this month. We plan to include only real estate from key global regions in the REITs. It is a REIT investing in Amazon logistics warehouses in Poland and prime commercial areas in Japan. Large corporations usually use REITs to securitize buildings, but we are different. We aim to create a model that provides investors with returns and can also offer capital gains at appropriate times.

The stock market has plunged and securities firms’ profits are declining. Will the dividend plan continue as is?

▲ One of Daishin Financial Group’s management philosophies is that when profits are made through management, they should be shared with investors. This philosophy has been passed down from the founding chairman, and continuing dividends until next year will mark the 25th consecutive year of dividends. There is no change in the dividend policy. At the recent shareholders’ meeting, Daishin Securities proposed a dividend guideline of KRW 1,200 per share.

We cannot avoid asking about the stock market. What is your outlook?

▲ In the past, the monetary authorities’ active responses to high inflation ultimately accompanied economic recessions or downturns. This time as well, concerns about economic downturn have emerged, and the stock market is likely to further reflect this economic contraction. Therefore, for the time being, investors should lower their expectations for returns and increase the proportion of safe assets with limited volatility. Above all, it is important to invest in areas you know well and have the patience to wait for the end of the downturn and the next upturn in the stock market.

How are you preparing for the Default Option system starting in the retirement pension market?

▲ Ultimately, returns are the most important. When the Default Option is implemented, each securities firm will have to focus on returns. Who would entrust money if returns are low? We emphasize collaboration with affiliates. We proposed a contrarian idea: put in the best products in the market. If we can present the best funds in the market, we believe we can take care of both returns and investors.

Interview by Jeon Pil-su

Summary by Hwang Jun-ho

Oh Ik-geun, CEO of Daishin Securities, is being interviewed on the 6th at Daishin 343 Building in Jung-gu, Seoul. Photo by Kang Jin-hyung aymsdream@