Korea's display, energy stocks on watch on improved Q1 earnings vs year-ago

Steel, energy, display and chemical categories sensitive to business cycle will likely turn around nicely in the first quarter against poor performance in the first half of pandemic-ridden 2020, data showed.

According to consensus compiling by financial data tracker FnGuide, 15 factory names in display, chemical, and steel categories are projected to swing to profits from losses of a year ago in the first quarter.

They include LG Display, Lotte Chemical, Hyundai Steel, solar panel maker OCI, and shipper HMM.

Earnings expectations have been fueling their shares.

Shares of 15 firms have jumped 19 percent on average so far this year, far outpacing Kospi’s 8 percent growth. The junior bourse Kosdaq even retreated 0.3 percent over the same period.

LG Display’s profit for the first quarter is estimated at 413 billion won ($374 million), compared with an operating loss of 361.9 billion won a year ago.

LCD panel prices remain strong on growing demands for IT devices and TVs while OLED panels continue to fly, said Kim Dong-won, an analyst at KB Securities.

Shares of the display maker have jumped 34 percent so far this year.

From the chemical industry, Korea Petro Chemical Inc. is tapped as a winner in turnaround. The firm is projected to record operating profit of 84.2 billion won in the first quarter this year, reversing from 45.7 billion won loss booked a year earlier.

Aviation and oil refining players’ first quarter also would look fairly well when compared with a year ago.

Korean Air Lines, the country’s largest full-service carrier, is estimated to report 88.2 billion won in operating income for the January-March period. It had incurred 82.8 billion won operating loss a year earlier.

Oil refiner S-Oil that suffered record high operating loss of over 1 trillion won in the first quarter last year is anticipated to reverse to the black this year.

In the securities sector, Korea Investment Holdings Co. is projected to make a comeback from last year’s heavy loss. The firm is expected to post operating profit of 320.5 billion won in the first quarter, compared with a 167.9 billion won loss incurred a year earlier.

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