The secret to Shinyoung Securities Co., LTD’s 53 years of operation in black despite the many shocks that have rocked the financial markets at home and abroad is its focus on building strength instead of trying to grow too big. Continuing the philosophy of "value investment" and "long-term investment" inherited from its founder, chairman Won Kuk-hee, the company has been careful in making decisions and focusing on what it does well. This conservative and cautious risk management is not without resistance. Deals that would easily pass the screening process at other firms are often rejected by Shinyoung Securities. However, with years of experience under their belts, they realize that their conservative judgment has been mostly correct. Shinyoung Securities foresaw the growth potential of the asset management sector early on and invested in it. The company's strength in value and long-term investments has been an advantage, as it has attracted more high-net-worth clients than short-term investors who prefer high-risk, high-reward investments. In addition, a stable corporate culture and active communication have enabled employees to deeply understand the company's management style, which has helped them focus on long-term performance.
There's a company that hasn't missed a single year of profit in 53 years. This is the story of a securities company that is bound to go up and down depending on economic conditions. Even when the IMF foreign exchange crisis in 1997 led to the collapse of major companies and financial firms and the KOSPI dropped to 280, the global financial crisis triggered by the Lehman Shock in 2008, and the recent coronavirus pandemic, the company has been in the black for more than half a century. Japan's Nomura Holdings Inc. has been in the black for 37 consecutive years since its founding in 1925, and even Goldman Sachs, which has been in the black since it went public in 1999, hasn't been immune to the financial crisis. A unique myth in the Korean financial industry is Shinyoung Securities.
Shinyoung Securities was founded in 1956 with the opening of the Korea Stock Exchange (now the Korea Exchange). It didn't always have a strong track record. The company changed hands four times and suffered from chronic losses, but its history of consecutive profits began in 1971 when founder and chairman Won Kuk-hee took over. Won Kuk-hee, the father of current CEO Won Jong-seok, acquired Shinyoung Securities with 30 million KRW, which he raised from friends and family, in addition to 5 million KRW he saved while working at Seoul Securities, an affiliate of Daelim Industries. He managed the company by brewing citrus tea at home for his clients, and eventually built Shinyoung Securities into what it is today.
Shinyoung Securities has never been a large-scale brokerage firm since its inception. As of March of this year, it had 1.52 trillion KRW in equity capital, ranking 14th among domestic securities firms. Instead of trying to grow too big, Shinyoung Securities has focused on building its strength as a mid-sized company. It has survived numerous crises through strict risk management and has prioritized building long-term trusting relationships with clients rather than quick profits. Its conservative and stability-oriented culture, which is distinctly different from other securities firms, has also contributed to its steady track record.
Today, the risks that threaten businesses are more diverse and complex. As a result, the rise and fall of companies has become more rapid than ever before, with fledgling companies becoming global players with astronomical valuations overnight, and decades-old companies disappearing into obscurity. Shinyoung Securities' consistent surplus is particularly significant. DBR takes a look at how Shinyoung Securities has managed to stay in the black.
This content was translated into English by AI (using DeepL) from an article that was originally written in Korean in the DBR (Donga Business Review). Therefore, please understand that there may be some awkward expressions.
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