Compared to 3 months ago, about half of the estimates are higher and half are lower.
Samsung SDI and Com2uS forecast ‘worsening’… Intech Plus and LG Chemical were downgraded.
“Falling exchange rate has limited impact on profits in the third quarter”
(Seoul = Yonhap News) Reporter Lee Min-young = The outlook for the third quarter performance of domestic listed companies is greatly different from company to company. More than half of the respondents said their expectations for operating profit had recently increased, while the rest had lowered it.
According to FnGuide, a financial information company, on the 27th, among the 232 companies for which three or more securities firms presented third-quarter earnings estimates as of the 21st, 127 companies, or 55%, had their third-quarter operating profit estimates revised upward compared to three months ago. There were 105 companies (45%) whose standards were lowered.
The company whose operating profit estimates for the third quarter were revised upward the most was Samsung SDI [006400].
Samsung SDI's operating profit estimate for the third quarter was raised more than eight times, from 14.8 billion won three months ago to 125.1 billion won. In addition to the improved performance of the ESS (Energy Storage System) business, the compensation paid by automakers when they fail to meet the minimum purchase quantity of batteries is also reflected, raising expectations for improved performance.
The second stock with the largest increase was Com2uS [078340]. As the success of the new game 'Zeus: God of Pride' released last month continued, the operating profit estimate for the third quarter was raised by 382% from KRW 2.3 billion to KRW 11.2 billion.
This was followed by SK Innovation [096770] (138%), HMM [011200] (118%), S-0il (95%), Simmtech [222800] (55%), and HD Hyundai [267250] (54%). As international oil prices continued to rise in the third quarter due to ongoing tensions in the Middle East, oil refining stocks appeared one after another among the stocks with the highest performance increase.
On the other hand, the company whose operating profit estimates for the third quarter were revised down the most was Intech Plus [064290].
As semiconductor equipment shipments were lower than expected and an operating loss was recorded in the second quarter, the operating profit forecast for the third quarter was lowered by 95% from 3.5 billion won to 200 million won in three months.
LG Chem's operating profit estimate for the third quarter was 190.6 billion won, down 63% from three months ago (512.2 billion won), the second largest adjustment.
This was followed by Mirae Asset Securities (-56%), Hana Tour [039130] (-42%), SK Ocean Plant [100090] (-38%), Ecopro BM [247540] (-36%), and IS Dongseo [010780] (-35%).
In the case of KOSPI stocks with the highest market capitalization, the performance expectations of large semiconductor stocks increased slightly, while those of the automobile and bio industries decreased.
Samsung Electronics [005930]'s third quarter operating profit estimate was revised upward by 5% in three months from 105.903 trillion won to 111.3772 trillion won, and SK Hynix [000660]'s third quarter operating profit estimate was revised upward by 2% to 78.1291 trillion won three months ago (76.9134 trillion won).
On the other hand, the operating profit estimate for Hyundai Motor Company [005380] was lowered by 5% compared to three months ago, and expectations for LG Energy Solution [373220] (-34%) and Samsung BioLogics [207940] (-6%) were also lowered.
As the operating profit estimates of Samsung Electronics and SK Hynix, which have a large market capitalization, were slightly revised upward, the total operating profit estimates of domestic listed companies in the third quarter increased by 4% to 257.7774 trillion won, compared to 3 months ago (247.8612 trillion won).
Meanwhile, the securities industry believes that the won/dollar exchange rate has been declining in the third quarter and that the impact of the exchange rate drop on the performance of domestic companies will not be significant.
Shin Hyeon-yong, a researcher at Yuanta Securities, pointed out, "Contrary to concerns, there has been no downward revision in KOSPI profit estimates despite the sharp drop in the won/dollar exchange rate in the third quarter. The key variable in the third quarter performance season is individual industry conditions, not the exchange rate, and it is not appropriate to interpret the strong won as a uniform negative factor for domestic corporate profits."
He continued, “In general, stocks with upwardly adjusted profit estimates have a high probability of recording an earnings surprise,” and suggested, “We need to select stocks with a high probability of an earnings surprise before announcing earnings.”
As KOSPI is recently in an undervalued range, some suggest that more attention should be paid to industries that are undervalued relative to their performance.
Kyeong-min Lee, a researcher at Daishin Securities, predicted, "The current KOSPI 12-month forward PER (price-to-earnings ratio) is 5.49 times, which is still in the severely undervalued range, so there is ample room for upside." He added, "In particular, semiconductors, shipbuilding, defense industry, retail distribution, and power equipment, which are undervalued relative to performance amid excessive declines, will lead the normalization of valuation."
