219 South Korean listed companies are expected to report combined Q2 operating profit of 206.8533 trillion won, a 257.96% increase from the same period last year, according to financial data provider FnGuide. The consensus estimate has surged 45.33% over the past three months, rising from 142.3278 trillion won in early April. Securities firms attribute the upward revisions to semiconductor-driven market concentration that has left fundamentally strong companies undervalued, with earnings surprises anticipated across distribution, materials/components/equipment, and securities sectors ahead of the July reporting season.
Q2 Profit Estimates Surge 45% in Three Months
FnGuide data shows that 219 companies with earnings estimates from three or more securities firms have a combined Q2 operating profit consensus of 206.8533 trillion won. Revenue and net profit are estimated at 865.9523 trillion won and 165.8445 trillion won, respectively. The operating profit estimate has increased 1.5023 trillion won over the past month alone, with upward revisions continuing into the earnings season.
Lee Kyung-min, researcher at Daishin Securities, stated: "While the domestic stock market has seen extreme concentration in semiconductor leaders, 19 sectors saw month-over-month operating profit consensus increases, with positive expectations for export stocks and some domestic demand stocks. We recommend trading centered on undervalued sectors relative to earnings and growth stocks neglected due to rapid interest rate increases, in addition to existing leaders."
Distribution, Semiconductor Materials, and Securities Lead Estimate Increases
The chemical sector recorded the largest monthly upward revision in Q2 profit estimates. Daehan Yuhwa's Q2 operating profit consensus rose 20.1% from 56.2 billion won to 67.5 billion won over the past month. LG Chem increased 14.2%, and Lotte Chemical rose 11.8%. The gains reflect lagging effects of oil price declines since March and improved product spreads.
The distribution sector saw estimate increases driven by foreign tourist growth from won weakness and improved consumer sentiment. Shinsegae's Q2 operating profit estimate climbed 10.9% from 131.9 billion won to 146.3 billion won. Hyundai Department Store rose 10.2%, and Lotte Shopping increased 6.1%.
Semiconductor materials, components, and equipment companies also experienced upward revisions following announcements by Samsung Electronics and SK Hynix of maximum capacity utilization and accelerated completion schedules for the Yongin semiconductor cluster. PS Key, a front-end equipment manufacturer, saw its operating profit estimate rise 16.8% over the past month, with its stock price surging 101.99%.
The securities sector benefited from surging trading volumes, with Mirae Asset Securities and NH Investment & Securities recording estimate increases of 7.0% and 2.3%, respectively.
Travel and Display Sectors Face Downward Estimate Revisions
Companies with sharp downward estimate revisions due to external factors such as exchange rates face heightened earnings shock risks. Hanatour's Q2 operating profit estimate was revised down 10.5%. LG Display's estimate shifted from an 1.1 billion won operating profit a month ago to an 82.7 billion won operating loss.
Lee Jung-bin, researcher at Shinhan Investment Securities, commented: "The chemical sector will show surprises reflecting one-time factors such as naphtha lagging effects, but sustainability is lacking. Rather than simple surprises, it is important to invest selectively by examining the sustainability of earnings improvements and the structure of profit attribution."
FAQ
What is the Q2 operating profit consensus for 219 South Korean companies?
FnGuide reports a combined Q2 operating profit consensus of 206.8533 trillion won for 219 companies with estimates from three or more securities firms, representing a 257.96% increase from the same period last year.
Which sectors saw the largest upward revisions in Q2 profit estimates?
The chemical sector recorded the largest monthly increase, with Daehan Yuhwa rising 20.1%, LG Chem 14.2%, and Lotte Chemical 11.8%. Distribution, semiconductor materials/components/equipment, and securities sectors also saw significant upward revisions.
Why did LG Display's Q2 estimate shift to an operating loss?
LG Display's Q2 operating profit estimate was revised from 1.1 billion won to an 82.7 billion won operating loss over the past month due to external factors including exchange rate movements, according to FnGuide data.
