Semiconductor sector boosts earnings outlook for Q3

The South Korean chip sector is projected to boost the earnings outlook for listed companies in the third quarter, data showed on Monday.

According to FnGuide on Monday, the consensus earnings forecast for 233 listed companies with projections from at least three securities firms showed that third-quarter operating profits are expected to rise by 4.3 percent compared to three months ago. Year-on-year, this represents a 53 percent increase.

The rosy projection is largely driven by the semiconductor industry.

Samsung Electronics Co.’s third-quarter operating profit forecast, initially estimated at 11.7 trillion won ($8.79 billion) three months ago, has been revised upward by 16 percent to 13.66 trillion won following its second-quarter earnings surprise.

SK hynix Inc., which posted 1.8 trillion won in operating loss in the third quarter of last year, is projected to record 7 trillion won in operating profit for the third quarter this year, up 27 percent in consensus from three months ago.

Hanmi Semiconductor Co. also saw its third-quarter operating profit forecast rise by 15 percent compared to three months ago.

The automotive sector is also experiencing upward revisions, with Hyundai Motor Co.’s operating profit estimate increasing by 301.2 billion won and Kia’s by 271.2 billion won over the same period.

The shipbuilding sector has seen the steepest increase in profit expectations.

HD Hyundai Mipo Co.’s third-quarter operating profit forecast has doubled to 22.5 billion won compared to three months ago, while HD Hyundai Heavy Industries’ operating profit forecast for the July-September period has risen by 54 percent to 184 billion won.

The shipbuilding sector’s upward cycle has already been reflected in stock prices since the second quarter.

CS Wind, which outperformed expectations by posting 129 billion won in operating profit in the second quarter, also saw its third quarter forecast rise sharply.

HD Hyundai Electric Co., which recorded an earnings surprise due to strong transformer exports to North America, has seen its profit forecast increase by 31 percent compared to three months ago.

Semiconductor equipment companies like Jusung Engineering Co. and KoMiCo Ltd. are also seeing their profit forecasts rise due to increased investment from downstream industries.

Companies like Lotte Tourism Development Co., Unid Co., and Yuhan Corp. are expected to see significant increases in operating profits compared to last year.

However, 124 out of the 233 companies analyzed saw their profit expectations fade, highlighting stark differences between industries.

Lotte Energy Materials Co., EcoPro BM Co., and YG Entertainment Co. are among those whose third quarter operating profit forecasts have dropped by more than 80 percent.

Retail and leisure industries, such as Hotel Shilla Co., T’way Air Co., and Shinsegae International Co., have also seen significantly lowered expectations.