[New Year's Message] Kim Won-kyu, CEO of Ebest Investment & Securities, "Achieving 1 Trillion KRW in Equity Capital and Becoming a Top 10 Mid-sized Firm in the Industry"

[Asia Economy Reporter Park Jihwan] Kim Won-kyu, CEO of Ebest Investment & Securities, presented the goal for this year on the 2nd through a New Year's address to become a mid-sized securities firm with 1 trillion KRW in equity capital and profitability ranked within the top 10. To achieve this, he emphasized the need to establish differentiated new business models, increase absolute returns with low market correlation, and effectively utilize the increased capital. Below is the full text of the New Year's address.

◆2020 New Year's Address

Hello to all members of the Ebest Investment & Securities family.

The Year of the Rat, symbolizing diligence, abundance, and prosperity, has dawned with the hopeful Gyeongja Year (庚子年). I wish abundance to fill your homes. I also sincerely thank our customers and partners who continuously support and care for the development of Ebest Investment & Securities. May all your wishes come true smoothly in the new year.

Last year was a meaningful time as I took office as CEO of Ebest Investment & Securities, experiencing hardships and achievements together with you all. The change in goal awareness among employees, which I emphasized in my first year, appears to have been successful, and I thank everyone who showed various achievements in a short time.

In 2019, we recorded the best performance in the 20-year history of the company. I salute the IB division, which achieved more than double growth compared to the previous year, the trading division and bond headquarters, which posted high profits even in a box-range market. The retail division also worked hard, successfully launching the next-generation MTS "Mine" based on big data and boldly overcoming difficult market conditions. The wholesale division’s role in expanding global business in a challenging market environment was also significant.

In 2020, due to global economic uncertainties triggered by the US-China trade conflict and the UK's Brexit, growth slowdown centered on developed countries was expected, but recently some of these risks seem to be easing. However, domestically, structural difficulties are intensifying, so even if the global economy recovers, the impact is expected to be limited. In an overall atmosphere of increased volatility, this year should be one to explore selective market opportunities through risk management and thorough internal control.

From a business perspective, the expansion phase of alternative assets that has been ongoing for recent years will continue. In real estate, due to pouring regulations and polarization trends, more caution than ever before is required, but new items that could become new asset classes are also expected to emerge.

The securities industry will continue to see a sorting out between large and small to mid-sized firms, and domestic and international economic trends are expected to be challenging. Despite various efforts by the government and private sectors, growth rates continue to decline, and international affairs are expected to be difficult due to various variables.

To all employees of Ebest Investment & Securities!

To overcome the challenges around us and strongly demonstrate our mid-term business goals inside and outside the company, we have set the 2020 management goal as "Securing the Core Foundation for Leap to No.1 Mid-sized Securities Firm."

Our ultimate goal is to become the No.1 mid-sized securities firm with 1 trillion KRW in equity capital and profitability ranked within the industry's Top 10. Having confirmed the possibility numerically in the first year of my tenure, this year we must verify whether we have a qualitatively solid profit model and the ability to achieve goals.

For this, we have selected the strategic tasks of ① establishing differentiated new business models, ② increasing absolute returns with low market correlation, and ③ effective use of increased capital. Since these tasks have been shared internally several times, I will omit the details and instead offer a few requests for implementation.

First, I hope you become people who share the values and philosophy of the company.

The path we want to take is a very difficult goal that has not yet been traveled. It is impossible to achieve it by the methods used so far. Everyone must not only have confidence that the goal can be achieved but also think about practical and qualitative methodologies to reduce waste and reach the goal. While individual abilities are important, organizational strength is more required now than ever.

Second, please actively embrace change.

The domestic securities industry is changing, and there have been many changes even in the past 10 years. Financial products focused solely on domestic stocks have expanded to global and alternative assets, brokerage competition has intensified, and equity investment has been activated. The source of financial products can no longer be limited to domestic markets but must consider the entire world. It is time to recall the principle of comprehensive financial products introduced when the Capital Markets Act was enacted.

In such a time of many changes, we must think about adapting quickly through benchmarking. We should closely examine competitors or overseas cases and frequently check if there are parts to adopt. From this year, we demand the company-wide strategy and business planning divisions to make efforts. The research headquarters must also strengthen company-wide functions not only supporting wholesale but also IB, S&T, and retail. As a lighthouse that always checks market changes first and disseminates them company-wide, please support sales with fast and wise analysis.

Third, the company must focus its capabilities on securing and nurturing excellent talent.

As the importance of capital increases among success factors in the securities industry and many companies immerse themselves in IB business, business risks are also growing. Accordingly, the gap between successful and less successful companies is widening, and many competitors are likely to undergo restructuring. In this situation, our employees must jointly nurture and innovate our valuable resources and establish a background to actively recruit excellent external talent. We will strengthen KPIs for resource nurturing and securing for team leaders and above this year and proactively upgrade resources for the leap to the No.1 mid-sized firm.

Fourth, we must strengthen true capital efficiency.

When dependence on a specific business increases, the portfolio effect naturally decreases, raising the overall risk coefficient of the company. Recently, many of our trading institutions have strengthened risk management, and controversies surrounding real assets such as real estate have increased, confirming the growing need for risk management. However, securities firms have responsibilities not only to guide investors to optimal investments but also as market participants to add liquidity to the market and play a role in the tributaries of the national economy. In this situation, true capital efficiency is not about simplistic ROE or ROI as in the past. From a mid- to long-term perspective, it must consider minimizing contingent liabilities so that both investors and the company can win, as well as the fresh and creative positive functions society demands from financial institutions.

Dear employees!!

The goals we have set are not insurmountable mountains. We are a chemical compound with a common goal. Please gather strength for yourselves, your families, and the company. I send infinite trust and gratitude to all employees doing their best in their respective positions and hope to spend a fierce yet rewarding time with you this year as well.

The story may have become somewhat heavy, but I believe that even at this moment, the majority of employees are quietly doing their best in their roles, laying the foundation for our company's sustainable growth. In the Gyeongja Year, I wish health and happiness to all your families.

This content was produced with the assistance of AI translation services.