Despite a recent downturn, five South Korean companies saw their credit ratings rise.

According to Seoul-based credit rating agency Korea Ratings Corp. (KR) on Tuesday, credit ratings of five Kospi-listed firms - Korea Petrochemical Industry Co. (KPIC), NOROO Paint & Coatings Co., FarmHannong Co., Yuanta Securities Korea Co. and Hanmi Pharmaceutical Co. (Hanmi Pharm) - were elevated by one notch.

KR said that it hiked the credit rating of KPIC from A- to A, as the synthetic resin maker posted better earnings than its peers with its operating margin of 15.7 percent backed by improved profitability in flagship products. With more cash coming into the company, its balance sheet was improved and the debt ratio fell to 48 percent.

The petrochemical company seeks to expand its Naphtha Cracking Center (NCC) by 2017, which costs the company over 500 billion won ($433 million). Yet the expansion is regarded as an affordable project and will strengthen its market position and profitability, said Choi Joo-wook, a senior researcher at KR.

Major credit rating agencies gave NOOROO Paint & Coatings A-, one notch higher from BBB+ as the industrial paint and ink producer fares well as one of the top three players in the country’s painting industry in terms of technology, business network and competitiveness. The paint producer has delivered improved profitability in sales of high value products such as waterproof car paints. Its operating profit came to 30 billion won, up 10 percent from a year ago.

Three other companies whose credit ratings were upgraded are: Hanmi Pharm (from A to A+), which achieved milestone deals with global drug companies last year, and Yuanta Securities Korea (from BBB to A), which turned to the black recently, and FarmHannong (from BBB to A-).

Haitai Confectionery & Foods Co. and its parent company Crown Confectionery Co. are also on the list for better credit ratings, said Park Chun-seong, a KR official. Haitai’s IPO price is set at 15,100 won per share and a total of 86 billion won will be raised from the IPO. This will help lower the company’s debt ratio which is at 300 percent level after the acquisition by Crown, he added. The Haitai IPO will improve the company’s financial health and ease the financial burden on Crown Group.

By Kim Hye-soon

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