The Biggest Earnings Surprise Stock in Q2 This Year is LX Hausys

Analysis of Earnings for 125 Companies Shows 49.6% Better Than Expected
Vieworks' Estimated Operating Profit at 10 Billion KRW Falls Short at 100 Million KRW, Underperforming

The Q2 earnings season has entered its latter stages. Despite concerns about an economic downturn, the results were not bad. Nearly half of the companies that announced their Q2 earnings this year recorded results that exceeded market expectations (consensus).

According to financial information provider FnGuide on the 8th, an analysis of the earnings of 125 companies that announced Q2 results and had consensus estimates from three or more institutions showed that the company with the largest positive deviation from estimates, an earnings surprise, was LX Hausys. LX Hausys recorded an operating profit of 49.4 billion KRW in Q2. The consensus estimate was 19.1 billion KRW, resulting in a deviation rate of 159.2% compared to the estimate.

Samsung Electronics followed with a deviation rate of 137.2%. Samsung Electronics posted an operating profit of 668.5 billion KRW in Q2, significantly surpassing the consensus of 281.8 billion KRW.

HanAll Biopharma recorded an operating profit of 8.1 billion KRW in Q2, with a deviation rate of 129.9% compared to the consensus (3.5 billion KRW), marking a triple-digit deviation rate alongside LX Hausys and Samsung Electronics.

SK IE Technology delivered a surprise profit despite market expectations of a loss. The market had forecasted SK IE Technology to record an operating loss of 1.5 billion KRW in Q2, but the company posted an operating profit of 900 million KRW. Hanssem was also expected to report an operating loss of 7.8 billion KRW but achieved an operating profit of 1.2 billion KRW.

Among the 125 companies, 62 companies recorded Q2 earnings that exceeded consensus, accounting for 49.6% of companies that posted better-than-expected results.

Conversely, 63 companies underperformed relative to estimates. The biggest earnings shock was experienced by Vieworks. Vieworks recorded an operating profit of only 100 million KRW in Q2, significantly below the estimate of 10 billion KRW. The deviation rate compared to the estimate was 98.5%.

Following were L&F (95.4%), Amorepacific (84.4%), S-Oil (80.8%), and LX Semicon (80.2%). L&F was expected to record an operating profit of 64.7 billion KRW but only achieved 3 billion KRW. Amorepacific posted an operating profit of 5.9 billion KRW, falling short of the consensus of 37.7 billion KRW.

Additionally, SK Innovation, MCNEX, Com2uS, and Jusung Engineering recorded unexpected losses. SK Innovation's Q2 operating profit consensus was 136.2 billion KRW, but it posted an operating loss of 106.8 billion KRW. MCNEX was expected to record an operating profit of 3.5 billion KRW but reported an operating loss of 2.3 billion KRW. Com2uS had a consensus of 200 million KRW but recorded a loss of 5.6 billion KRW. Jusung Engineering's Q2 operating profit consensus was 6.9 billion KRW, but it posted an operating loss of 8.7 billion KRW.

While Q2 earnings were generally favorable, there is an assessment that the pace of earnings improvement has slowed compared to the previous quarter. Choi Yoo-jun, a researcher at Shinhan Investment Corp., said, "The Q2 earnings season was favorable," adding, "If the current trend continues, an overall earnings surprise can be achieved."

Choi Jae-won, a researcher at Kiwoom Securities, analyzed, "Among the companies that announced earnings, 49% exceeded the earnings consensus, but compared to about 54% of companies that recorded earnings surprises in Q1, it can be confirmed that the momentum of earnings improvement slightly slowed in Q2."

However, expectations for profit improvement in the second half of the year have diminished. Researcher Choi Yoo-jun explained, "Expectations for second-half profits have lowered in this earnings season. While there is recognition that the profit bottom has been passed, the timing of the rebound has been delayed," attributing this to "the disappearance of the reopening effect in China and sluggish exports." He added, "Similar to Q1, earnings announcements have proceeded, and the 12-month forward earnings per share (EPS) has been revised upward. The upward revision of earnings estimates largely reflects increased expectations for next year's profits," emphasizing, "It is necessary to consider the rapid rise in earnings estimates despite the decline in exports."