[Click eStocks] Subsidiary Profit Growth Expected for 'SK' and Rising Order and Dollar Sales Share for 'Samba' Draw Attention

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] Yuanta Securities on the 29th highlighted SK, Samsung Biologics, LG Innotek, CJ CheilJedang, and Lotte Shopping as stocks to watch this week.

First, Plug Power, whose largest shareholder is SK, is expected to benefit from a large-scale hydrogen fuel supply contract with Amazon.com. Additionally, Innovation, Telecom, and E&S, which are the sources of SK's dividends, are expected to see significant profit growth compared to the previous year. The combined operating profit of unlisted subsidiaries is estimated to have increased from around 700 billion KRW in the first half of last year to about 1.7 trillion KRW in the first half of this year.

Samsung Biologics has increased its order volume. The additional orders in July and August include MSD (172 million USD), Sillag (Johnson & Johnson, additional 81 million USD), and AstraZeneca (350 million USD), bringing the current order volume to 1.2772 trillion KRW, surpassing last year's 1.1602 trillion KRW. The continued strength of the dollar is also positive for Samsung Biologics, which has a high proportion of dollar-denominated sales.

LG Innotek is expected to gain momentum from the launch of the new iPhone model in the second week of September. Based on spec upgrades mainly for the Pro series, an increase in the company's camera module blended ASP is anticipated. This, along with favorable exchange rate conditions, is expected to positively impact second-half performance. As the second half of this year progresses, the medium- to long-term growth drivers are gradually becoming clearer and are expected to act as future stock price momentum. Attention should be paid to the clear medium- to long-term growth directions from 2022 to 2025 (Folded Zoom, XR, automotive camera modules).

Meanwhile, Yuanta Securities also selected CJ CheilJedang and Lotte Shopping as recommended stocks this week. CJ CheilJedang was positively evaluated due to the strong performance and price increases of processed foods both domestically and internationally. Regarding Lotte Shopping, it was noted that the fundamentals of core business units such as department stores and large supermarkets are strengthening, with particular emphasis on the increased possibility of abolishing the mandatory closure system for large supermarkets.