In spite of chaos in South Korean Government and global economic depression, major South Korean corporations are clearly showing positive performance. While electronic industries are showing their best performance in early this year, automotive markets are also showing signs of improvement. In order to minimize any outside variables, it is expected that these corporations will continue their increase trend in their performance throughout this year based on their good start in first quarter.
According to electronic industries and stock industries on the 5th, it is estimated that electronic companies such as Samsung Electronics, LG Electronics, and SK Hynix are going to have their biggest first quarter performance in this year.
Due to booming in semiconductor markets, it is predicted that Samsung Electronics and SK Hynix will have earning surprise level of performance starting from first quarter.
There are predictions that believe that Samsung Electronics’ operating profits in first quarter will be bigger than its operating profits in last fourth quarter. It is unusual that operating profits in first quarter, which is a slow season, will be bigger than operating profits in fourth quarter, which is a peak season. According to FNGuide, consensus of Samsung Electronics’ operating profits in first quarter is $7.56 billion (8.7088 trillion KRW). However recent reports estimate that its operating profits will easily surpass $7.81 billion (9.00 trillion KRW). KB Securities and IBK Investment & Securities Co., Ltd. Are estimating that its operating profits will be $8.07 billion (9.30 trillion KRW) and $8.16 billion (9.40 trillion KRW) respectively.
“Due to booming business in memory industries, it is predicted that Samsung Electronics will bring down Intel, which has been in the first place in semiconductor for 24 years, and rise to the top in operating profits in this year.” said Lee Seung-woo who is a researcher for IBK Investment & Securities Co., Ltd. “Samsung Electronics’ operating profits in 2017 will be around $40.8 billion (47.0 trillion KRW) which is 61% increase from last year.”
It seems that SK Hynix will also benefit from booming in semiconductor industries as it is estimated that its operating profits in first quarter will easily surpass $1.74 billion (2.00 trillion KRW).
“Recent supply and demand of semiconductors is favorable and this is leading to improvement in competitive edge of SK Hynix.” said Do Hyeon-woo who is a researcher for Mirae Asset Daewoo. “It is estimated that its operating profit in first quarter and in 2017 will be $1.90 billion (2.19 trillion KRW) which is 43% increase from previous quarter and $6.06 billion (6.98 trillion KRW) respectively.”
It is expected that LG Electronics, which shocked the markets by recording a loss in fourth quarter of last year, will start to recover its performance starting from first quarter. As its MC (Mobile Communication) Business Headquarters, which was in a slump, is reducing the amount of gap in losses, it is estimated that its operating profits in first quarter will be around $434 million (500 billion KRW). Depending on the result of its strategic Smartphone called G6, which is going to be released at the end of March, there is a high chance that its performance will be greatly improved after second quarter.
It seems that Hyundai Motor Group, which was in a slump in 2016, is starting to recover its performance. Until this January, its domestic sales volume decreased by 9.5% compared to last year. January of 2016 was a really tough time as even demands that were on stand-by were sold due to stoppage of reduction of individual consumption tax in 2015. This year’s sales volume even lower than last year’s January when it was in a huge slump. Besides there was more sense of crisis as this performance came out while it was selling more than 10,000 new Grandeurs.
Hyundai Motor Group recaptured its pace in February by releasing special edition model and implementing marketing strategies with high intensity including cash support event. In February, Hyundai Motor Group sold 53,113 cars in South Korean markets which is 8.7% increase compared to last year and 17.8% increase compared to January and was able to sell 288,232 cars to foreign markets which is 0.3% increase due to increase in amount of products in foreign markets. Hyundai Motor Group explained that positive sales in newly-rising markets such as China, India, and Brazil based on strategic models for those countries have led overall sales in foreign markets. Total sales volume from January to February was bout 340,000 cars and it was 1.4% increase from last year.
As major companies are making positive performance in spite of variety of unfavorable factors, forecast of this year is becoming brighter. They can expect to have high growth if foreign variables such as financial world’s politics on major corporations decrease. However protectionism by the U.S. and China is something that they have to overcome. Current state of South Korean Government and early presidential election still remain as variables.
Staff Reporter Kwon, Keonho | firstname.lastname@example.org & Staff Reporter Mun, Bokyeong | email@example.com
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