INTERVIEW Shinhan Investment's research head aims to bolster roles of stock analysts

Yoon Chang-yong has been leading Shinhan Investment's research center as its chief since early January. Yoon speaks during a recent interview at his office in Seoul. / Courtesy of Shinhan Investment Corp.

By Anna J. Park

Shinhan Investment's Yoon Chang-yong, 42, is currently the domestic securities industry's youngest research center chief. Yoon became the research head in early January, following his 15-year career as an extraordinary analyst with a particular expertise in macroeconomics. He had been ranked as the top analyst in the field of macroeconomics from 2012 to 2019 by Korea's major business dailies.

Based on his solid capacity as an analyst, Yoon has made a successful transition as the research center head, despite the initial burden and concerns about assuming a managing role.

“People often ask me what it feels like becoming the youngest research center chief among securities firms in Korea. But I think age itself is not something important at all,” Yoon told The Korea Times during a recent interview.

As Shinhan Investment's new research center chief, Yoon said he aims to lead the team, based on a three-pronged strategy.

First of all, he emphasized that stock analysts' research should be conducted on a deeper level, bringing valuable insights beyond a simple profitability analysis and market valuations.

“With the threats from COVID-19, companies have been put in a dire situation in which they have to worry whether they could survive or not. Now is the time that analysts need to look deeper into businesses beyond a basic profitability analysis. Rather, they need to take diverse approaches, ranging from closely analyzing a company's cash flow, accounting and credit-rating consulting, and the essence and values created by analysts could be deeper and wider,” he said.

He also stressed that analysts need to hone in on how to appropriately evaluate the values of a firm's intangible assets, especially when it comes to software or biopharma companies.

Secondly, Yoon said he aims to expand research analysts' roles into new areas, such as businesses' relationship marketing (RM), to create further added value to the work of analysts. For instance, he explained that analysts can advise companies hoarding massive amounts of cash on how to effectively invest the money.

Thirdly, his research team has also been partaking in innovative startup initiatives, using their own expertise and knowledge, such as information on overseas stocks.

Regarding how he could maintain the unyielding top position as the best macroeconomics analyst for several years, before he was appointed to head the research center, the experienced financial expert said he thoroughly observes data, while gleaning the most important information of companies in each sector at the microeconomic level.

“Basically, data of macroeconomics ought to be something that's been outdated. For instance, now it's May, yet we only have the GDP data of the first quarter. And as financial asset prices change much faster than past data, it's not easy to predict the prices based on a macroeconomics approach,” he explained, adding that skillful macroeconomists might be able to see a big general trend, while it's very hard for them to predict short-term fluctuations.

That's why he said he carefully looks into “bottom-up” analyses based on each company in each sector, in order to close the gap with the “top-down” analysis perspective of macroeconomics.

“The aggregation of bottom-up analysis made up a macroeconomic perspective; thus, analysts of this area need to closely gather specific information of micro-players to form a big picture. I have tried to amass bottom-up information as much as possible to close the gap,” he said, explaining that he often takes a contrarian approach as well, as business cycles are shortened.

As to COVID-19's impact on the economy, the research chief said that although there exist numerous scenarios about how the current situation would play out in the future, he remained optimistic about the Korean economy.

“Not only is the nation equipped with a strong public health system and universal health insurance, but Korean companies' competitiveness in the global market is considered pretty robust, as its economy has well-balanced sectors comprised of strong software, bio and hardware industries,” Yoon said, adding that such a well-balanced economy would be beneficial in leading the nation's further economic growth even after the global pandemic.