Mirae Asset Securities Co. Ltd.

In addition, MAS' overseas alternative investments are mostly in subordinated tranches or equity, which we deem as risky. That said, the firm's exposure to real estate project financing in Korea relative to its shareholders' equity is small compared with the industry average. The negative rating outlook on MAS reflects our expectation that Korean securities firms' sizable property exposure in both domestic and overseas markets could strain their asset quality and profitability over the next one to two years. We may lower the ratings on MAS if property market risk further escalates, materially damaging the asset quality and profitability for Korean securities firms, including MAS. We could also lower the ratings on MAS if: The company's risk-adjusted capital (RAC) ratio falls

...Property risks remain high for Korean securities firms. Their sizable property exposure in both domestic and overseas markets could hurt asset quality and result in subdued profitability in the next one to two years. We believe the '###-' anchor for Korean securities firms, the starting point for our ratings, is under downward pressure. Mirae Asset Securities Co. Ltd. (MAS) could also face headwinds related to its sizable property exposure. While the firm's exposure to overseas alternative investments relative to its shareholders' equity is moderately lower than the industry average of about 30% at end-2023, by our estimate, MAS is mainly exposed to commercial properties in the U.S. and Europe, where vacancy rates have increased rapidly in recent years. In addition, MAS' overseas alternative investments are mostly in subordinated tranches or equity, which we deem as risky. That said, the firm's exposure to real estate project financing in Korea relative to its shareholders' equity is small...

Full Report