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Kospi-listed firms expected to see operating profits gain 19% in Q3: report

Prolonged pandemic widens gap between flourishing sectors, virus-hit industries

(Yonhap)
(Yonhap)

The companies listed on Korea’s main bourse Kospi are likely to see their operating profits post a V-shaped recovery in the third quarter this year and jump 19 percent from a year earlier, a financial market tracker said Sunday.

Local brokerages forecast that 147 listed firms will post a combined 35.44 trillion won ($30.39 billion) for the July-September period, up 19.4 percent from last year’s 29.68 trillion won, according to the poll by FN Guide.

They also predicted that the aggregated net profit will rise 24.9 percent on-year to mark 25.18 trillion won, but that sales will fall 4.3 percent to post 419.86 trillion won.

Market watchers said businesses affected by COVID-19 started to rebound in the second quarter, in line with earlier projections that the economy would recover in the second half of this year.

“Amid the virus outbreak, the fundamentals of industries such as contactless (services), health care, secondary batteries and electric vehicles remained relatively strong, raising the overall earnings forecast,” said Lee Chang-hwan, an analyst at Hyundai Motor Securities.

Among the 79 companies that are expected to see gains in profit are market kingpin Samsung Electronics and runner-up chipmaker SK hynix.

On the back of a strong performance by its mobile and consumer electronics units, Samsung’s operating profit is estimated to surge 31.9 percent on-year to 10.26 trillion won. SK hynix is anticipated to see its profit hike 183.3 percent, but the outlook is 28 percent lower than it was three months ago due to slumping sales of memory semiconductors.

In contrast, struggling sectors such as hotels, leisure industries and airline operators are likely to go into the red as more people are staying in amid the ongoing virus threat. Department stores are also expected to record a deficit in the cited period, declining 48.5 percent on-year.

Some market observers warned against painting a rosy picture, as the latest on-year improvement is partly due to the base effect from last year, when the US-China trade dispute weighed upon the economy.

“As we’re still facing an economic slump, it is hard to expect overall earnings surprises this year,” said Lee Jung-bin, an analyst at IBK Securities.

By Jie Ye-eun (yeeun@heraldcorp.com)
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