Dagong Brochure - New

一支新兴评级力量登上国际舞台Dagong Steps onto the International Arena as a New Credit Rating Power

1. Brief Introduction2. International Development3. Products & Services4. Methodology & Procedure5. Research & Development

02-0910-2122-2627-3334-37

Contents

1 Brief Introduction

3www.dagongcredit.com

Overview

Founded in 1994China-based top-tier credit rating agency (CRA) 100% independently and privately owned

Ratings covering over 70 sovereigns

Over 10,000 clients

Licensed by Chinese authorities to conduct ratings on all issuers and securities

A major credit rating agency carrying out state-level projects


Dagong’s Code of Conduct

Established in accordance with IOSCO Code of Conduct Fundamentals for Credit Rating Agencies

Under supervision of Chinese regulatory authorities

Maintaining independence and objectivity

Compliance with professional ethics and ALL related laws, rules and regulations where rating activities take place

Pursuing transparency and disclosure

Addressing conflict of interests

Monitoring preservation of confidentiality


Memberships & Qualifi cations

Member of the Association of Credit Rating Agencies in Asia (ACRAA)

Member and Supervisor of the National Association of Financial Market Institutional Investors (NAFMII)

Director of the Securities Credit Rating Committee, Securities Association of China (SAC)

President of the Credit Committee of China Information Industry Association (CIIA-CC)

Member of China Federation of Industrial Economics

Member and Executive Director of China Association for the Promotion of Industrial Development

Member and Executive Director of China Marketing Association

Designated Credit Rating agency by China Futures Association (CFA)


Sovereign: 16 analysts

Corporate: 121 analysts

Public utilities: 37 analysts

Financial institution: 19 analysts

And others

More than 30 postdoctoral research fellows

Credit Professionals

Bachelor 3.8%Master 73.7%

Doctor 22.5%

235 credit analysts

Education

73.7%

3.8%

22.5%

73.7%

22.5%


Issues of RMB 1 trillion (EUR 120 billion)

10,000 enterprises rated

70 sectors/subsectors

RMB 110 billion bank loans (EUR 13 billion)

RMB 300 billion project investment funds (EUR 36 billion)

Dagong’s Achievements


Sovereign Ratings


Clients

2 International Development


Dagong released sovereign ratings for 50 countries for the first time.

Dagong with Korean and Japanese CRAs, jointly hosted the 4th China-Japan-Korea Credit Rating Forum in Shanghai, discussing “Building A New International Credit Rating System”.

President Guan Jianzhong visited Autorité des Marchés Financiers, BNP Paribas S.A., and the European Commission, Directorate General Internal Market and Services.

Dagong released 2011 Global Sovereign Credit Risk Outlook.

President Guan Jianzhong gave a speech on ASEAN+3 Bond Market Forum “International Credit Rating System Reform, A New Perspective”.

International Development Timeline

Jul 2010

Oct 2010

Dec 2010

Jan 2011

Feb 2011


Dagong released A Guide to Credit Risk of China’s Banking Sector 2011 , covering 27 domestic banks. Apr 2011

Dagong, KPMG (China) and FTSE Group published a joint authored report China Capital Market Research Report II in Hong Kong. The report addressed the importance of RMB as international reserve currency and launch of Shanghai’s International Board. Jun 2011

Dagong issued credit rating report for CIMB Bank, the second largest consumer bank in Malaysia. July 2011

President Guan Jianzhong was invited to give a speech in National University of Singapore on “US debt crisis 2011 and International Credit Rating System Reform”. Sep 2011

International Development Timeline (continued)


Dagong conducted its first solicited sovereign rating on the Republic of Belarus. Apr 2012

Dagong conducted its first rating on an European financial institution, Banco Espírito Santo (BES), the third largest bank in Portugal. Feb 2012

Dagong published 2012 Global Sovereign Credit Risk Outlook. Jan 2012

International Development Timeline (continued)

TodayDagong continues to explore and expand business around the world.


Dagong's Rating Rating Action Other CRAs

Argentina B 2010.07.11 B- to B 2010.07.12 Fitch

B- to B 2010.09.13 S&P

Portugal A- 2010.07.11 Aa2 to A1 2010.07.13 Moody’s

Estonia A 2010.07.11 BBB +to A 2010.07.19 Fitch

India BBB 2010.07.11 Ba2 to Ba1 2010.07.26 Moody’s

Iceland BB , 2010.07.11 outlook to 2010.07.30 Moody’s outlook negative negative (Baa3)

12 Rating Actions Where Dagong Preceded


Dagong's Rating Rating Action Other CRAs

Russia A, outlook 2010.07.11 outlook from 2010.09.08 Fitch

stable stable to

positive, (BBB)

Spain A 2010.07.11 Aaa to Aa1 2010.09.30 Moody’s

Hong Kong, AAA 2010.07.11 Aa2 to Aa1 2010.11.11 Moody’s

China

China A A+ 2010.07.11 A1 to Aa3 2010.11.13 Moody’s

Ireland BBB 2010.12.06 A+ to BBB+ 2010.12.09 Fitch

AA to BBB+ 2010.12.20 Moody’s

12 Rating Actions Where Dagong Preceded


Dagong, A Voice of the World

Published by Daily Mail, U.K. on April 11, 2011


Dagong, A Role of Responsibility

Boao Forum for Asia Annual Conference, on April 9, 2010President Guan Jianzhong was received by Mr. Xi Jinping, Vice President of China while attending the Boao Asian Forum 2010 Annual Meeting as one of the 50 representative entrepreneurs from home and abroad.


Dagong, A Pillar of Pluralism

CCTV News Oct 24, 2010


Dagong, A Brand of the Country


Dagong, An Ally of Our Peers

The 4th Session of China-Japan-Korea Forum on Credit Rating, held on October 22, 2010 in Shanghai, China


Sponsor: China Center for International Economic Exchanges

Acknowledgement: Dagong Global Credit Rating Co., Ltd.Held on July 2-4, 2009 in Beijing, China

Dagong, A Participant of Global Affairs

3 Products & Services


1. Issuer Ratings

Financial Institution Corporate Sovereign

Local Government

Banks InsuranceCompanies TrustsFunds Leasing

CompaniesAll

SectorsGlobal Utilities

Products & Services


2. Debt Ratings

Corporate Bonds

Commercial Paper

Financial Debt

Products & Services

Mid-term Notes

Structured Finance

Convertibles


3. Credit Risk Consultancy

Risk Monitoring & Assessment

Credit Risk Management Training

State-own Enterprises

Project Bidders

Public Companies

Industrial Enterprises

Commercial Enterprises

Risk Management

Internal Control

Products & Services


4. Commissioned Studies & Research

5. Risk Management

Software Solutions

Products & Services

Region-specific

Credit Risk

Sovereign Credit Risk

Sector-specific

Credit Risk

Investment Risk

Public Company

Credit Risk

4 Methodology & Procedure


A country’s ability to create wealth is the foundation of its solvency

A country’s economic growth potential depends on the government’s state governance

A country’s financial system is the driving force in the course of wealth creation

A country’s credit rating system influences its financial security

A country’s fiscal strength directly determines its solvency

A country’s local currency value is a key factor impacting its debt repayment capability

Six Pillars of Sovereign Credit Rating


Sovereign Rating Framework

1. State Governance Capability2. Economic Strength3. Financial Strength4. Fiscal Strength

Local Currency Debt Rating

5. Foreign Exchange Strength

Foreign Currency Debt Rating


Soundness and sustainability assessment constitutes the footstone of the credit risk evaluation of a corporate entity

The analysis of stand-alone solvency should take a dynamic angle rather than plainly static approaches

Strong external support is usually a dominant factor to underpin a relatively higher rating scale

Piercings of the sovereign ceilings are acceptable under certain conditions

Four Principles of Dagong’s Corporate Ratings


Corporate Rating Framework

Issuer Default Rating

I. Environment Analysis

II. Viability Assessment

III. Funding Profile

IV. Debt Repayment Capability

1. Macro Environment2. Industry Prospect3. Policy & Regulation

1. Corporate Governance & Development Strategy2. Operation & Competition Status3. Earnings Profile

1. Bank Loans2. Capital Market Funding3. External Support

1. Current Debt Burden2. Trend Forecast of Future Debt 3. General Credit Risk Status


Dagong's Code of Conduct and IOSCO Code of Conduct Fundamentals for Credit Rating Agencies

3-level assessment management (One primary analyst – Three supervisors – Committee decision)

Unique and patented rating system and database

1. Preparations

2. On-site Evaluation

3. Data Processing

4. Report Compiling

5. Preliminary Rating

7. Final Rating

6. Assessment by the Rating Committee

General Rating Procedures

Feedback


AAAAA+AAAA-A+AA-BBB+BBBBBB-BB+BBBB-B+BB-CCC+CCCCCC-CCCD

Highest Quality

High Quality

Strong Payment Capacity

Adequate Payment

Likely to Fulfill Capacity

High Credit Risk

Very High Credit Risk

Near Default with Possibility of Recovery Default

DefinitionsIssuer's Default Rating

5 Research & Development


Dagong’s College & Postdoctoral Research Station

Dagong Credit Management School was established in cooperation with Tianjin University of Finance and Economics

The Postdoctoral Research Station, a unique training and research program dedicated to credit rating industry


R&D Management

Academic Research Committee: R&D planning and decision-making on research subjects and directions

R&D and Rating Approval Committee: Approval on research subjects and directions

Industrial/Sector analysts: Assistance & implementation on specific research tasks

Regional research: Domestic and global research

Data Centre: R&D technical support


R&D force consisting of more than 50 post-doctors and over 200 analysts with master's degree or above

International joint researches with the local rating agencies in Japan and Korea

Annually updated research subjects

Timely product development based on research achievements

Research Strength

Documents

Dagong Brochure - New