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Transcript of KOSDAQ : A Window into the Korean Capital Market 9th XBRL International Conference (Auckland, New...
KOSDAQ : A Window into the Korean Capital Market9th XBRL International Conference (Auckland, New Zealand)
K O S D A Q S t o c k M a r k e t I n c . M A Y 10 ~ 14. 2 0 0 4
A Window intothe KoreanCapital Market9th XBRL International Conference
K O S D A Q
I : About KOSDAQ01. KOREA & IT Industrial Development02. KOSDAQ is …03. Key Statistics
III : Star Index Project (Expansion Project)01. Introduction 02. Enhanced Features compared with the Pilot Project03. Approach04. Benefits
Ⅳ : Global Investor Relations Management Project 01. Introduction02. Approach03. Benefits04. Issues to be Considered
II : Review of XBRL Pilot Project01. Introduction02. Approach03. XBRL Pilot Service at KOSDAQ
Ⅴ : Next Steps01. KOSDAQ’s Efforts02. Next Steps03. Vision of KOSDAQ
Mission of KOSDAQ XBRL Project
Summary of KOSDAQ XBRL Project
01. KOREA & IT Industrial Development ( World Competitiveness)
I : About KOSDAQ
5th1st 2nd
TFT-LCD Internet User(2003)Mobile Phone User
(2003)
1st
Semiconductor
2nd12th 5th
Trade Scale(2003) Automobile Shipbuilding
12th
GDP(2002)
02. KOSDAQ is …
I : About KOSDAQ
BT3%
CT6%
IT42%
Finance3%
Others3%
Transportation1%
Logistics5%
Construction2%
Manufacturing35%
KOSDAQ has achieved unprecedented growth along with that of Korea's flourishing IT industry.
Entrepreneurial pioneers in the IT, BT, and CT industries are making their dreams come true through KOSDAQ and they form a vital resource for Korea's future economic growth.
02. Key Statistic - Among Asia New Markets
I : About KOSDAQ
JASDAQ(Japan)
Gre Tai(Taiwan)
KOSDAQ(Korea)
359
‘99‘97 ‘01 ‘02 ‘03
395
702
843874
(Unit: Co’s)(Unit: Co’s)
‘99‘97 ‘01 ‘02 ‘03
4
429
1,728
1,2051,078
(Unit: bil.KRW)(Unit: bil.KRW)
500
1000
1,078
#listed co’s Trading ValueDaily Avg. Trading Value
(DEC,2003)
03. Key Statistic - Global Status
I : About KOSDAQ
(US$ bil.)
* WFE Dec. 2003
Rank
No. of ListedCompanies
Rank
AccumulatedTrading Value
Rank
Market Cap.
1 Mumbai(5,644) 1 NYSE (9,692) 1 NYSE (11,328)
2 TSX Group(3,616) 2 Nasdaq (7,068) 2 Tokyo (2,953)
3 Nasdaq(3,294) 3 London (3,624) 3 Nasdaq (2,844)
4Spanish Exchange (BME)(3,223)
4 Tokyo (2,130) 4 London (2,425)
14 KOSDAQ(874) 13 KSE (459) 16 KSE (298)
17 KSE(684) 19KOSDAQ(223)
41 KOSDAQ(31)
Mission of KOSDAQ XBRL Project
Active support of companies seeking growth
(Increase brand value)
Protect investorsthru increased transparency (Build investor confidence)
Make effortsto set global standards for
a sound capital market(Enhance market integrity)
Mission of KOSDAQ
Phase1Phase1
PilotProject
Star IndexProject
Global IRManagement
Project
Phase2Phase2
Phase3Phase3
Project Evolution
01. Introduction - Project Goal
II : Review of XBRL Pilot Project
InvestorTrust
Investment
SimplerProcess
KOSDAQ-PwC
-UB Matrix
COMPANIES INVESTORS
StandardizedFinancial Statements
Faster Update of F/S & Enhanced Analytical Tools
- Approval from XBRL International- XBRL adoption among participating Korean Companies
Establish K-GAAP Taxonomy
- Provide standardized Financial Statements through XBRL - Empower investors by providing enhanced analytical tools
Increasing Market Transparency
- KOSDAQ is the first organization in Korea to deploy XBRLFrontier in XBRL Technology in Korea
Pilot Star IRM
02. Approach - Tasks & Steps
K-GAAP Taxonomy Definition/ Establishment based on Korean Companies Accounting Principles
In actual industry accounting practices over 2,500 accounts were used, FSS Element Extension
Naming and defining down to the level of Individual Company’s User defined Accounts (excluded in FSS Accounts Schema)
Phase 1. K-GAAP Taxonomy (Korean Standards)
Phase 2. Extended FSS Taxonomy (Commercial & Industrial)
Phase 3.Company Extension
* FSS : Financial Supervisory Service
*
II : Review of XBRL Pilot Project Pilot Star IRM
03. XBRL Pilot Service in KOSDAQ
II : Review of XBRL Pilot Project Pilot Star IRM
FSS Taxonomy (2,541 detail
accounts)
GAAP Taxonomy (815 representative
accounts)
Mapping Table
Expansion
XBRL Instance Document
On-line Viewers(Web)
Off-line Viewers(Excel)
View/ Analyze
Converter
Auditor’s Reportin Annual Report
(SGML)
03. XBRL Pilot Service at KOSDAQ
II : Review of XBRL Pilot Project
KOSDAQ Web-based Financial Analytical Site
Excel-based Financial Analytical Tool
Pilot Star IRM
-Effects on Foreign Investor Market Cap. Movement
7 Jan 200426 Dec 2003
XBRL Service Advertisemen
t toForeign
Investors
XBRLServi
ceLaunc
h22 Apr 2004
03. XBRL Pilot Service at KOSDAQ
II : Review of XBRL Pilot Project Pilot Star IRM
StarIndex
Selection
01. Introduction – Why Star index project?
III : Star Index Project
Success of XBRL Pilot Service & Recognition
of Value of XBRL
Increased Demandfor XBRL Services
by Listed companies
Maximizing Value of XBRL thru Selection of
High Quality Companies
STARINDEX
PROJECT
Improve &Expand Scopesof Pilot Project
Platform Leading into
Global IRProject
Increase Visibility of
BlueChip Index
ImproveCorporate Image
& BrandRecognition
Expansion ofInvestment
Pool
Pilot Star IRM
01. Introduction – Why Star index project?
III : Star Index Project
Corporate governanceFinancial soundness
Earnings performance
“BLUECHIP” Index of KOSDAQ
NASDAQ Nasdaq100KOSDAQ Star30
Star Index – Companies chosen based on SUPERIOR earnings performance, financial soundness, corporate governance, liquidity and market cap.(37.5%)
BT3%
CT6%
IT42%
Manufacturing35%
Construction2% Logistics
5%
Others3%Finance
3%
Pilot Star IRM
02. Enhanced Features of Star Index Project
III : Star Index Project
[ Phase1 ] Pilot Project [ Phase 2 ] Star Index Project
30 Star index Companies
Company Level Taxonomy
Additional Non-Financial Information
Taxonomy Versioning
15 sample companies
FSS Taxonomy
FSS Code
Financial Information only
KOSDAQ Code
(5)Advanced ApplicationPilot Application
(1)
(2)
(3)
(4)
(6)
Pilot Star IRM
02. Enhanced Features of Star Index Project
III : Star Index Project
STAR Index ProjectPilot Project
GAAP Taxonomy
FSSTaxonomy
GAAP Taxonomy
B CompanyTaxonomy
A CompanyTaxonomy
C CompanyTaxonomy
A’s Auditor’s
Report
Element NameElement Name
KOSDAQ CodeFSS Code(SGML)
B’s Auditor’s
Report
C’s Auditor’s
Report
A’s Annual Report
B’s Annual Report
C’s Annual Report
Financial Information Financial + Non-Financial Information
Architecture Inheritance Data Flow
Pilot Star IRM
III : Star Index Project
Pilot Project
Samil(PwC), UBmatrixContractor
Star Index Project
15 Companies 30 Star Index Companies
Samples
15 Weeks(28 Jul 03~10 Nov 03)
12 Weeks(29 Mar 04~17 Jun 04)
Duration
Universal StudioWeb AnalyzerOracle, JSP, Excel
UB AutomatorWeb AnalyzerOracle, JSP, Excel
Software
Deliverables Korean GAAPTaxonomyWeb/Excel Analyzer
K-GAAP + 30Companies TaxonomyWeb/Excel Analyzer
Pilot Star IRM
03. Approach – (1) 30 Star Index Companies
[ PHASE 1 ] [ PHASE 2 ]
III : Star Index Project
1. Analysis of Financial Statements for 30 Listed Companies
2. Create Taxonomy Elements inherited from Korean GAAP Taxonomy
3. Mapping FSS Code-KOSDAQ Code to Elements
Taxonomy can be detailed into Each Individual Company Level Inherited from Korean GAAP Taxonomy Presentation and Calculation Separated
Pilot Star IRM
03. Approach – (2) Company Level Taxonomy
03. Approach – (3) KOSDAQ Code
III : Star Index Project
Create KOSDAQ Code and Mapping in accordance with FSS Code Mapping Individual Company Level Taxonomy Elements
Financial Reports(FSS Code)
Converting FSS code to KOSDAQ code
• FSS code - 14 digits - approx. 3,000 accounts
• Limit of FSS code - meaningless user defined code(approx8%) - lack of F/S hierarchy
• F/S code + Hierarchy code + FSS code
- 21 digits
• Designed system environment to accept company level taxonomy - Meaningful user defined code
B/SK11
I/S K12Quick Assets 1010
Inventories 1020
F/SCode
(3digit)
HierarchyCode
(4digit)
FSSCode
(14digit)
Marketable Securities 11114000010000
Trade Receivables 11115000010000
Trade Receivables K11101011115000010000
Allowance for Doubtful Accounts for Trade Receivables K11101011115900020001
Pilot Star IRM
03. Approach – (4) Non-Financial Information
III : Star Index Project
Label_Korean Label_English Name Parent Name Order
직원현황 Employee Information
EmployeeInformation
Key Performance Indicator of Annual Report
1
연구개발비용Research and Development Cost Information
ResearchandDevelopmen-tCostInformation
Key Performance Indicator of Annual Report
2
신용평가등급 Credit Evaluation Grade Information
CreditEvaluationGrade-information
Key Performance Indicator of
Annual Report
.
...
.
.4
Non-financial Indices from Annual Report is Taxonomy-Structured Key Indices from Annual Report
Research andDevelopmentCost Amount
Accounting policyfor Research and Development cost
Research and Development Cost per Sales
Pilot Star IRM
03. Approach – (5) Advanced Application
III : Star Index Project
Taxonomy Building / Instance Creation
UBMatrix Automator
Taxonomy was made with excel & imported into Automator to generate XSD file.
Microsoft Excel
Pilot Star IRM
03. Approach – (5) Advanced Application
III : Star Index Project
Develop Web AnalyzerEnhanced graphic display to compare annual information from multiple companies
Enhanced graph
Pilot Star IRM
03. Approach – (5) Advanced Application
III : Star Index Project
Develop Excel AnalyzerVisual financial data. Simplified user interface for easier navigation.
Visualization of financial data
Pilot Star IRM
The Labels of elements in individual taxonomy could be changed in annual financial reports.
Taxonomy Version Management through differentiation of Label in Years.
The custom roles of label is defined for label versioning.
Instance document
KGAAP(XML Schema)
Individual taxonomy(XML Schema)
Label LinkbasePresentation LinkbaseCalculation LinkbaseReference LinkbaseDefinition Linkbase
Label LinkbasePresentation LinkbaseCalculation LinkbaseDefinition Linkbase
Standard label rolehttp://www.xbrl.org/2003/role/label
Custom label roleshttp://www.kosdaq.com/2004/role/label1999http://www.kosdaq.com/2004/role/label2000http://www.kosdaq.com/2004/role/label2001
…
Pilot Star IRMIII : Star Index Project
03. Approach – (6) Taxonomy Versioning
04. Benefits
III : Star Index Project
Individual CompaniesCan Manage
Taxonomy Elements
Non-FinancialInformation
Can be Standardized
Structured Taxonomy Elements will be Mapped to Each Company’s Accounting System
XBRL formatted Financial Information will be Saved in Repository as Data Base
KOSDAQ Code acts as a Buffer Adjusting to Changes in Company’s New Transaction & Accounting Terms
Key Performance Indicators from Annual Reportwill be provided to Investors in XBRL
Platform Leading into Global IR Project & Expanding the number of Applied Companies
Linking Financial Statements to Non-Financial Info. will Enhance Corporate Performance Analysis
Pilot Star IRM
01. Introduction – Why Global IRM Projcet?
IV : Global IR Management Project
The traditional financial reporting model is no longer adequate– Declining relevance of historical data as an
indicator of future performance
– The market wants more information about non-financial factors
Under-value
True Value
FinancialInformation
AdditionalNon-FinancialInformation
XBRL PilotProject
Star IndexProject
Future Business Reporting Model
Global IRManagement
Project
01. Introduction – Why Global IRM Project?
IV : Global IR Management Project
To Provide “Value Embedded Corporate Management Contents" to the market more efficiently
2000 Time
Typical Financial Information
Reporting to Financial Supervisor
Analyst CorporateReports & Forecasts
“Information Gap”
NOWNOWNOWNOW
? Time
“Information Gap”
Added ValueReporting
After Global IRM ProjectAfter Global IRM ProjectAfter Global IRM ProjectAfter Global IRM Project
Typical Financial Information
Reporting to Financial Supervisor
Analyst CorporateReports & Forecasts
Information needs Information needs
Pilot Star GIRM
01. Introduction – Why Global IRM Project?
IV : Global IR Management Project
Question 1.
Do you believe your share price accurately reflects the true underlying value of your company? Over 80% companies believe they’re “undervalued”
Question 2.
Does the market fully reflect a company’s true valuation? What more could KOSDAQ do for the companies to be evaluated correctly in the market? - More IR & Promotion to domestic/overseas 81.4%
18.5%
63.0%
13.0%1.9% 3.7%
0.0%
20.0%
40.0%
60.0%
80.0%
StronglyDisagree
Tend toDisagree
Neither Tend toAgree
StronglyAgree
KOSDAQ CEO
Survey (’03.11.18)
Pilot Star GIRM
Correct Evaluation of companies with New Global IR Model
Correct Evaluation of companies with New Global IR Model
Integrity of Informationusing XBRL
Integrity of Informationusing XBRL
Do the Right Thing Do Things Right
Global IR Best practices
Establishing Benchmarks
Capital Market EfficiencyCapital Market Efficiency
01. Introduction – Project Goal
IV : Global IR Management Project Pilot Star GIRM
“Quality Market Place forShareholders & Venture Firms”
“Quality Market Place forShareholders & Venture Firms”
Analytical Review of Disclosure, Corporate Information
CEO, CFO Interview/Survey
Analytical Review of Disclosure, Corporate Information
CEO, CFO Interview/Survey
Industry KPI to meet Global IR StandardsIndustry Standardized Investor Briefing Model
Industry KPI to meet Global IR StandardsIndustry Standardized Investor Briefing Model
Web Design & Application supportProvide Information on the Web
Web Design & Application supportProvide Information on the Web
Review of Analyst, Fund Manager reportsCapital Market Stakeholders’ Interview/Survey
Review of Analyst, Fund Manager reportsCapital Market Stakeholders’ Interview/Survey
Industry Standardized IB & KPI TaxonomyReference check for KPI validation
Industry Standardized IB & KPI TaxonomyReference check for KPI validation
Analyze Current Status of Sample Companies
Review & VerifyMarket Information
Establishment ofStandardized IB Model
Industry StandardizedTaxonomy
Web Designing& Mapping
(5)
(1)
(2)
(3)
(4)
02. Approach
IV : Global IR Management Project Pilot Star GIRM
02. Approach – Project Diagram
IV : Global IR Management Project
View/Analyze
Taxonomy Builder
Build Data Elements
Taxonomy Builder
Build Data Elements
VR F/S
On-lineViewers(applet)
Off-lineViewers
(eNumerate, Excel, etc.)
ListedCompanies
ListedCompanies MarketMarket
Apply inDomestic/
Overseas IR &Fair
Disclosure
Apply inDomestic/
Overseas IR &Fair
Disclosure
Achieve Correct
Corporate Evaluation
&Efficient Capital Market
Achieve Correct
Corporate Evaluation
&Efficient Capital Market
Value Reporting Data
F/S, Disclosure Data
Marketing Data
Investor Briefing Standardized
Report
Pilot Star GIRM
03. Benefits
IV : Global IR Management Project
BENEFITSBENEFITS
More FinancialResources
More FinancialResources
Market ParticipantsMarket Participants GOALGOAL
Improved
Market
Quality & Integrity
Transparent Information Builds InvestorConfidence
Upgrades Service for
Star Index Companies
Attractive &Efficient
Capital market
Attractive &Efficient
Capital market
Your MarketOf Choice in N-E ASIA
Visibility(Greater Brand Value)
Visibility(Greater Brand Value)
Correct evaluationCorrect evaluation
Increase the MarketStability
Increase the MarketStability
New Biz ModelNew Biz Model
Promotion of IR ModelPromotion of IR Model
EnhancedApplication Tool
EnhancedApplication Tool
BetterInvestment Decisions
BetterInvestment Decisions
Pilot Star GIRM
03. Benefits
IV : Global IR Management Project
Kosdaq listed companies are IT start-ups Active co-operation is required for project success
Lack of IR capability in smaller listed companies The critical role that Non financial data plays in evaluating Corporate
value in certain industries (i.e. IT : speed to Market of new services)
Provide relevant material & information about KPI of each company
Detailed Feedback from each company to generate Industry KPI data by Kosdaq
Assume Intermediary role of Providing New Form of Data in XBRL format Between consulting firms & listed companies
Establish New Biz Model : Industry IR Tools (IB Template) Providing Financial Information services
Assume Intermediary role of Providing New Form of Data in XBRL format Between consulting firms & listed companies
Establish New Biz Model : Industry IR Tools (IB Template) Providing Financial Information services
Periodical updates of KPI of each company Utilize of KPI information in domestic/oversea IR
Increased reliability of the KPI information
KOSDAQ Stock Market
Listed Companies’Active Co-operation
During Project
After Project
Pilot Star GIRM
Application toStar Indexcompanies
XBRL
: Global Standard for Corporate Financial Reporting, “Container” of Corporate Disclosure Information,
eXtensible Business Reporting Language eXtensible Business Reporting Language
ContainerContainer
• Create Instance Document thru Corporate Regulatory Reports & Creation of Taxonomies
Key Performance Indicators
Key Performance Indicators
ContentsContents
• XBRL Application to Star Index• Financial Institutions’ Analysis
with KPI of Global IR Mgmt
Strategy
Global IR MgmtFramework
Managing for Value
Value Strategy
MarketOverview
Value Platform
DocumentDatabase
Enhanced Reporting
Analysis Service
Enhanced Reporting
Analysis Service
BusinessBusiness
• On-Line Analytical Processing & Marketing of Financial Institution’s Analysis
Taxonomy( e.g. <deposit>100</deposit>)
Financial Institutions KOSDAQReports
Web Server
Excel Server
Global IR Management Framework
: “Contents” to analyze Corporate Management Key Performance Indicators
KOSDAQ Stock Market
: Increased self-regulatory capability enhances Financial Information Supply Chain
Summary of KOSDAQ XBRL Project
0%0%
5% 5%
10%10%
15%15%
20%20%
‘00
‘00
‘01‘01 ‘02
‘02
‘03
‘03
Mar. ‘04Mar. ‘04
Global IR(NY, HK, London)
Asia New Market Forum(Seoul, Taipei)
MOU with Gretai Securities (Taipei)& Shenzhen Stock Exchange (China)
Pilot Project Launch
Star Index Project Launch
Global IR Mgmt Project Launch
XBRL Project
Star Index Launch
XBRL KOSDAQ Local Seminar
XBRL Education for Star Companies
Meeting with the Press for promotion of XBRL
01. KOSDQ`s Efforts
V : Next Steps
“Foreign investors presently hold
19.3%19.3% of
’s total market cap.”
7.0%
XBRL Int’l ApprovalXBRL Int’l Approvalon K-GAAP Taxonomyon K-GAAP Taxonomy
XBRL Int’l ApprovalXBRL Int’l Approvalon K-GAAP Taxonomyon K-GAAP Taxonomy
StrategicStrategicGlobalGlobal
AlliancesAlliances
StrategicStrategicGlobalGlobal
AlliancesAlliances
After Global IR After Global IR Management ProjectManagement Project
After Global IR After Global IR Management ProjectManagement Project
• Co-operate with FSS, *KSE for Korea Standardization in Working Group
• Announce K-GAAP Taxonomy as Standard Financial Reporting for Korean Companies with the aid of FSS, KSE & ** KASB
• Co-operation with FSS to improve e-disclosure infrastructure from existing SGML to XBRL & XML.
• Stock Exchanges adopting XBRL (Canada, New Zealand, Japan, China etc.) & Global Information Vendors (Bloomberg, Reuters etc.)
• Sharing Knowledge of XBRL Project know-how - XBRL Format Financial Information Exchange- English Disclosure Exchange
• Value Reporting Enhancement• ASP Service using XBRL• Expand participating companies by Market
Consolidation (2004)
02. Next Steps
V : Next Steps
•*KSE : Korea Stock Exchange ** KASB : Korea Accounting Standards Board
03. Vision of KOSDAQ
V : Next Steps
Providing Venture Capital
Providing various investment tools
COMPANIES INVESTORS
Restoring growth balance between SMEs & Con
glomerate
Restoring growth balance between SMEs & Con
glomerate
Facilitating growth in
Knowledge-based industries
Facilitating growth in
Knowledge-based industries
Enhancing competitiveness
of exchange industry
Enhancing competitiveness
of exchange industry
Building Public TrustBuilding Public Trust
through XBRL
Demo – XBRL Website Main
Demo – Single Company
Demo – Multi-Company
Demo – Excel Analyzer Main
Demo – Single Company
Demo – Excel Analyzer Main
Demo – Multi-Company
Thank you!Thank you!MINHEE SHINMINHEE SHIN
[email protected]@kosdaq.com