China’s Dagong Global Credit mounts challenge to ‘big three’ rating agencies

Dagong Global Credit Group, a 22-year-old mainland credit rating agency with global ambitions, has upped the ante in its bid to compete with the “big three” with a plan to expand bureaus outside China and poach analysts from the ranks of rivals like Standard & Poor’s and Fitch Ratings.

Rather than challenge global agencies by relying on its historical strength in rating mainland companies or cross-border yuan-denominated debt issuances, Dagong executives said the focus of its international expansion is to compete head on in the big three’s traditional turf of rating “G3 credit” issuances by international companies – in dollar, yen and euro.

To that end, founding chairman Guan Jianzhong, who has 100 per cent control of Dagong, is funding a global expansion with his personal fortune. Outside of mainland China, the company already has offices in Hong Kong, Milan in Italy and Frankfurt in Germany, and has mapped out new destinations for offices to be opened this year, including Kuala Lumpur, Malaysia and Moscow, Russia.

“Dagong is here to compete with the big three. I can’t say we are at the same level yet, but we believe in the years ahead, in time, we can move closer,” said Jonathan Hu, Dagong’s senior director of business development. “We have a niche position where we are because we ‘get’ China [and] we have exposure with the [emerging and peripheral] countries where the big three aren’t covering well at all.”

In Hong Kong, which serves as its Asia headquarters, Dagong has just hired Tony Tang, most recently S&P’s director of greater China, corporate ratings, as its head of corporate ratings. In other recent hires, Warut Promboon, a well-known figure in Asia’s credit trading community, who previously served as Societe Generale’s research director of Asian credit trading, is Dagong’s chief rating officer, while the Hong Kong office is now led by Simon Choi, former head of research technology for Goldman Sachs.

Terry Zhang, associate managing director and a longtime Dagong employee from Beijing, is spearheading the location search as part of its international expansion.