NH Investment & Securities Develops Korea-Specific Industry Classification System, a First Among Securities Firms

NH Investment & Securities announced on January 7 that it has collaborated with Koscom to independently develop the 'NHICS (NH Industry Classification Standard),' the first industry classification system specialized for the Korean stock market to be created by a domestic securities firm.

NHICS is part of a strategy to strengthen data-driven decision-making and research competitiveness, which has been continuously pursued since Byungwoon Yoon took office as CEO of NH Investment & Securities. The system was developed to go beyond short-term product performance competition, enhance the structural understanding of the domestic capital market, and build an investment infrastructure that can be utilized by all market participants. NH Investment & Securities was responsible for designing the industry classification system and classifying listed companies, while Koscom handled external provision and the actual calculation of industry indices. This marks the first time in Korea that a securities firm and a financial IT specialist organization have combined their expertise to jointly develop an industry classification system.

NHICS is a three-tiered industry classification system that organizes domestic listed companies into 13 major, 31 mid-level, and 73 sub-level categories, allowing for a clearer and more multidimensional understanding of industry performance. Its most notable feature is that it actively reflects the structure and characteristics of the Korean capital market, as well as the perspective of actual investors. For example, the secondary battery industry, which is highly significant in the Korean stock market, has been established as an independent major category. In existing classification systems, secondary battery companies were included in the IT industry, causing their performance to be mixed with others; however, NHICS enables a clearer analysis of industry-specific performance. The system also reflects the structure of the Korean capital market by establishing holding companies as a separate major category, taking into account domestic corporate governance and market realities.

Another distinguishing feature is its market-friendly approach. While company classification is fundamentally based on revenue composition, it also incorporates qualitative analysis by industry experts to comprehensively reflect a company's role within its industry and its status from an investment perspective. For example, Hyundai Rotem was previously classified under the 'Machinery' industry in existing systems, but in NHICS, it has been reclassified under Aerospace and Defense, considering the strategic importance of its defense business. This allows for a more accurate analysis of both industry performance and corporate contribution. In addition, intuitive terms such as 'Platform' have been actively introduced in place of abstract global classification terms like 'Interactive Media and Services,' improving both information accessibility and usability for investors.

CEO Byungwoon Yoon stated, "NHICS is the result of our efforts to strengthen data and research competitiveness since my appointment, and it is an industry classification system that faithfully reflects the structure of the domestic stock market and the perspective of investors." He added, "As an industry classification system that enhances the structural understanding of the Korean capital market, we plan to make it easily accessible for a wide range of market participants, including pension funds, institutional investors, and individual investors."