[MarketING] Q3 Earnings Season Arrives... "Move Based on Earnings Reports"

Expected KOSPI Band, 2550~2680 Range
Focus on SK Hynix Earnings on the 24th
Need to Select Companies with Favorable Earnings Outlook

This week, the domestic stock market is expected to see sector-specific rallies as companies begin to release their third-quarter earnings reports in earnest. NH Investment & Securities has projected the KOSPI index to trade within the range of 2550 to 2680 points this week.

[Image source=Yonhap News]

According to the Korea Exchange on the 20th, the KOSPI closed last week at 2596.91, down 3.09 points (0.12%) from the previous week. During this period, individual and institutional investors net bought 376.4 billion KRW and 595.5 billion KRW respectively in the stock market, while foreign investors net sold 1.1618 trillion KRW.

This week, with major companies scheduled to announce earnings, sector-specific rallies are anticipated. Starting with Hyundai Construction on the 22nd, Samsung Biologics on the 23rd, Hyundai Motor, SK Hynix, and KB Financial on the 24th, and Kia and HD Hyundai Electric on the 25th, key domestic companies will release their earnings reports. In the U.S., major big tech companies such as Alphabet, Tesla, and Amazon will also announce their results.

Particular attention is on whether SK Hynix’s earnings deterioration can revive semiconductor investment sentiment. Jin-Hyuk Kang, a researcher at Shinhan Investment Corp., stated, "There were reports from major foreign media about Samsung Electronics delaying the receipt of ASML equipment for its semiconductor plant in Texas, USA," adding, "We need to watch whether the SK Hynix earnings announcement on the 24th can turn investor sentiment around."

As the earnings season officially begins, it is advised to identify and respond to stocks expected to show favorable results.

Young-Hwan Kim, a researcher at NH Investment & Securities, said, "In Korea, ahead of the full-scale earnings announcements, earnings forecasts are being revised downward due to fading expectations for semiconductor sector recovery and reduced currency effects on export companies," adding, "Selective approaches are necessary for companies with favorable earnings outlooks. Over the past two weeks, sectors with upward revisions in both third and fourth-quarter net profit forecasts include utilities, telecommunications, securities, shipbuilding, and trading & capital goods."

NH Investment & Securities expects the KOSPI to fluctuate between 2550 and 2680 points this week.

Kyoung-Min Lee, a researcher at Daishin Securities, noted, "It is important to pay attention to the fact that the automobile, transportation, telecommunications, banking, and securities sectors have entered undervalued territory relative to earnings in both the three-month and one-month consensus," analyzing, "In particular, the automobile, steel, shipbuilding, banking, securities, and telecommunications sectors are undervalued relative to earnings while their one-month consensus is being revised upward."