As South Korean listed companies release their Q3 earnings forecasts, the outlook varies significantly by sector. The semiconductor and refining industries, benefiting from increased demand for memory chips driven by artificial intelligence (AI) and rising international oil prices due to the Iran conflict, have seen their earnings estimates raised. In contrast, sectors such as automotive, bio, and chemicals have experienced downward adjustments.
According to a survey conducted by financial information firm FnGuide on 232 listed companies, 55% of the firms, or 127 companies, have raised their Q3 operating profit estimates compared to three months ago. Conversely, 105 companies, or 45%, have lowered their profit forecasts.
Notable among the companies with increased estimates are semiconductor giants Samsung Electronics and SK Hynix. Samsung's Q3 operating profit estimate was adjusted upward from 105.9 trillion won to 111.4 trillion won, a 5% increase over the past three months. SK Hynix's estimate rose by 2% to 78.1 trillion won from 76.9 trillion won.
The company with the most significant upward revision is Samsung SDI, whose Q3 operating profit estimate surged from 14.8 billion won to 125.1 billion won, an increase of more than eight times. This improvement is attributed to better performance in its energy storage system (ESS) business and compensation payments from automakers for not meeting minimum battery purchase requirements.
Com2us also saw a substantial increase in its Q3 operating profit estimate, rising 382% from 2.3 billion won to 11.2 billion won, likely due to the continued success of its recently launched game, 'Zeus: God of Olympus.'
The prolonged conflict between the U.S. and Iran has heightened volatility in international oil prices, leading to increased earnings forecasts for related sectors.
SK Innovation, HMM, and S-Oil have all seen their Q3 earnings estimates raised by 138%, 118%, and 95%, respectively. Other companies, such as Simtec (55%) and HD Hyundai (54%), also experienced significant upward adjustments.
In contrast, the automotive, bio, and chemical sectors have seen their operating profit forecasts downgraded. Among the top market capitalization companies, Hyundai Motor's operating profit estimate was lowered by 5% compared to three months ago, while LG Energy Solution and EcoPro BM saw reductions of 34% and 36%, respectively. Samsung Biologics also faced a 6% downgrade.
In the battery sector, the increased adoption of Chinese-made LFP batteries by European automakers and rising local investment costs due to the diversification of nickel, cobalt, and aluminum (NCA) supply chains for North American ESS have put pressure on earnings.
LG Chem's Q3 operating profit estimate was also revised down to 190.6 billion won, a 63% decrease from 512.2 billion won three months ago. Other companies, including Intek Plus (-95%), Mirae Asset Securities (-56%), Hana Tour (-42%), SK Ocean Plant (-38%), and IS Dongseo (-35%), also faced significant downgrades.
Meanwhile, the slight upward adjustments in the operating profit estimates for Samsung Electronics and SK Hynix, which hold substantial market capitalization, have led to a total estimated operating profit of 257.8 trillion won for domestic listed companies in Q3, a 4% increase from 247.9 trillion won three months ago.
Analysts believe that the recent decline in the won-dollar exchange rate will have a limited impact on the earnings of domestic companies.
* This article has been translated by AI.
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