On May 28, Korea Ratings Corporation changed the outlook on Hyungji Global's unsecured bond credit rating from 'Stable' to 'Negative.' However, the credit rating itself was maintained at 'B+'.
Korea Ratings Corporation cited the continued weak operating performance due to an unfavorable business environment as the reason for the change in credit outlook.
The agency pointed out, "As the unfavorable business environment persists, the company has seen a contraction in scale and a decline in profitability since 2021, resulting in operating losses. Currently, aside from its subsidiary Nabi Co., Ltd., there are no affiliates generating significant revenue."
Additionally, it assessed, "Although the company plans to create synergy with its existing golfwear business through ventures such as sports management, the fundamental competitiveness of its core business has weakened, and the possibility of recovering its business scale in the short to medium term is limited."
Since 2021, Hyungji Global has been posting consecutive net losses, leading to a decline in total equity. As of the end of March, total equity stood at 41.2 billion won, a decrease of 15.1 billion won compared to the end of 2023. Korea Ratings Corporation noted, "As of the end of March, Hyungji Global's debt ratio was 139.9%, an increase of 68.6 percentage points from 71.3% at the end of 2023," and added, "It is necessary to monitor the effects of capital expansion on the improvement of the company's financial structure."
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