Analysts turn extreme in profit range for major Korean Inc. amid volatility

Analysts are deeply divided in performance outlook of Korean major companies to underscore the gravity of the fog over the global economy and market next year.

NH Investment & Securities estimated SK hynix would report an operating profit of 2.51 trillion won ($1.9 billion) in 2023 as of Nov. 24, according to FnGuide. In contrast, Samsung Securities projected a loss of 2.96 trillion won for the world’s second largest memory maker.

Their yawning difference owes to the mixed view on the chip industry for 2023.

Doh Hyun-woo, an analyst at NH Investment, expected that the down cycle would end in the second quarter to lead to improved performance from the third quarter.

Hwang Min-sung at Samsung Securities disagrees as he finds chip cycle to be different from the past.

The gap between the top estimate for Samsung Electronics operating profit of 41.94 trillion won made by BNK Investment & Securities and the bottom projection of 27.43 trillion won widened by more than 14 trillion won.

Hyundai Motor’s operating profit consensus is 10.11 trillion won, but the most pessimistic forecast is 7.83 trillion won. Kia also nearly doubled the gap between the upper end of its forecast of 10.33 trillion won and the lower end of 5.85 trillion won.

Consensus on refiners is also extreme.

The most upbeat project for SK Innovation’s operating profit is 5.90 trillion won and the worst at 1.43 trillion won. Korean Air’s operating profit estimates range from 1.31 trillion won to 4.38 trillion won. As air cargo rates will inevitably fall, demand from the passenger operations will determine the company’s profitability, market analysts said.

There are also mixed views on other companies. HMM, South Korea’s biggest shipping company, had estimates swaying from an operating loss of 437.3 billion won to a profit of 5.77 trillion won. Shinyoung Securities said a slowdown in consumer spending and a drop in freight rates were reasons for forecasting an operating loss.

In the case of LG Display, only Korea Investment & Securities and DAOL Financial Group expected the company to report a profit next year. Projections for SK Square, Samsung Life Insurance and Pearl Abyss were also mixed.

Korea Electric Power Corp. (KEPCO), which is expected to post its worst result this year, also showed wide gap in earnings outlook for next year. KB Securities expects another loss of 22.44 trillion won, while Kiwoom Securities is projecting a loss of 4.95 trillion won.