1. Innovation of Dagong’s credit rating methodology
Dagong develops credit rating methodologies based on Dagong’s Principle of Credit Rating. Different from Western rating methodology, which is focused on default rate and emphasizes more on verification than warning, Dagong’s rating methodology measures the repayment security level of issuers through the degree of deviation between repayment sources and true wealth creation capability to reveal the real risk of issuers with complete and rigorous inner logic function of pre-warning credit risks.
2.Technology Management Structure and Team
Dagong has set up a Technology Committee responsible for finalizing technology standards for various credit ratings assigned. The committee consists of experts in macro-economy, law and policy, capital market and industry research. All 300 analysts of the technology team hold master degrees.
3.Direction of Technology Development
Dagong’s technology development based on Dagong’s Principle of Credit Rating, covers the main branches of the national economy, including financial institutions, businesses and utilities. In terms of the product category, it covers ratings on various credit instruments including general bond products, hybrid securities, money market instruments, structured financing products and various non-standardized credit and quasi-credit instruments. Perfect rating technology standards aimed at the industries and product categories above have been established, followed by continuous renewal and improvements.
4.Technology Standard and Service Content
Relying on its rich accumulation in research, Dagong continuously releases research reports aimed at various issues in macro-economy, policy, debt market development, industry research, and new product research. In 2015, Dagong published mover 20 papers and research reports on various domestic authoritative journals. Meanwhile, Dagong unceasingly provides research reports and technical services through its Dagong Credit and media platforms such as Wechat.
The rating standard and technical services provided by Dagong’s technology system mainly include the following categories:
(1) Industry rating standard: Relying on long-term data accumulation and technology improvement, Dagong has established complete industry rating criteria covering 40 major industries of the national economy and over 100 subsectors.
(2) Product rating standard: With regard to various new credit products, Dagong would timely set rating standards and apply them in the rating practice.
(3) Industry research report: Dagong releases the industrial research reports and outlook reports on industrial credit risks on over 30 key industries on a regular basis to timely reveal the industrial development trends and risk changes.
(4) Macro and policy research report: Dagong promptly releases research report to interpret changes in the macro economy and significant policy changes.
(5) Bond market research report: Dagong regularly publishes research report on dynamic changes in the bond market, especially in credit risks.
(6) Special subject research report: Dagong irregularly releases research reports on various issues related to rating technologies to provide services for investors.