[Good Morning Stock Market] Focus on Samsung Electronics Earnings... KOSPI Expected to Start Higher

The KOSPI is expected to start higher on the 5th.

The New York Stock Exchange was closed the previous day due to Independence Day. European markets showed strength, supported by easing political uncertainties in the UK and France and optimism about the earnings season.

In France, the far-right National Rally (RN) won 33.1% of the vote in the first round of the recent early general election, but a poll released the previous day indicated that the National Rally would secure only 190-220 seats in the second round, falling short of the majority of 289 seats. This has helped alleviate uncertainties related to potential far-right governance, such as government paralysis and fiscal deterioration.

In the UK early general election exit poll, the opposition Labour Party is reported to have a high likelihood of securing an overwhelming majority with 410 out of 650 seats in the House of Commons. The ruling Conservative Party is expected to win 131 seats, signaling a change of government for the first time in 14 years, which is boosting expectations for the new administration.

The Eurex KOSPI200 futures fell 0.1% the previous day. On this day, the KOSPI is expected to open higher, supported by the resolution of election uncertainties in the UK and France, a decline in market interest rates, and stabilization of the won-dollar exchange rate.

Han Ji-young, a researcher at Kiwoom Securities, said, “Samsung Electronics’ Q2 operating profit consensus is expected to be 8.2 trillion won, a 1,128% increase compared to the same period last year,” adding, “The Device Solutions (DS) division’s operating profit is expected to be in the high 3 trillion to mid-5 trillion won range, and the annual operating profit forecast is 19 trillion to 21 trillion won, which will fully recover last year’s loss of 14 trillion won.”

Han also noted, “The market mentions that the high-bandwidth memory (HBM) 3E qualification test for Nvidia is targeted for 8 stacks in Q3 and 12 stacks in Q4, respectively,” and analyzed, “Expectations include flexible performance improvements in legacy DRAM, and as risk appetite spreads, it will be important to see whether Samsung Electronics’ stock price can be re-rated with a price-to-book ratio (PBR) of 2.5 for SK Hynix and 1.5 for Samsung Electronics this year, as well as whether export stocks, which were adjusted due to interest rate variables, will rebound.”

Kim Seok-hwan, a researcher at Mirae Asset Securities, forecasted, “The disclosure of specific details regarding value-up tax support will also positively affect investor sentiment.”

Meanwhile, the one-month non-deliverable forward (NDF) won-dollar exchange rate in New York was 1,379 won, suggesting that the won-dollar exchange rate is expected to open 3 won lower compared to the previous day.