Corona's Impact on Corporate Performance: 'Untact Soared, Contact Crawled'

Clear Improvement in Q2 Earnings for Untact-Related Companies like Electronic, Internet, and Medical
Automobile and Steel Sectors Hit Hard by COVID-19 Impact

[Asia Economy Reporters Changhwan Lee and Juyoun Oh] Untact (non-face-to-face) and Contact (face-to-face). A midterm review of the Q2 earnings of listed companies shows that companies related to untact sectors such as electronics, internet, and gaming, which benefited from the spread of COVID-19, showed clear performance improvements, while contact-related companies such as automotive, steel, and finance were hit hard by the pandemic.

On the 5th, Asia Economy analyzed 162 companies that have announced preliminary Q2 earnings and had earnings forecasts from at least three securities firms, based on data from financial information provider FnGuide. Among them, only 76 companies, or 47%, showed improved operating profits.

The remaining 53%, or 86 companies, experienced a decline in earnings. Despite the ongoing spread of COVID-19 in Q2, more than half of major companies struggled with poor performance.

Among the 76 companies with improved earnings, 29 (38%) were untact-related companies in electronics, internet, and gaming. Semiconductor companies represented by Samsung Electronics and SK Hynix stood out the most.

Samsung Electronics and SK Hynix saw significant profit increases in Q2 due to a surge in demand for server and PC semiconductors driven by the rise in remote work and online education amid the COVID-19 spread. Naver also achieved record-high Q2 earnings, supported by increased untact demand in online shopping and webtoons.

Medical, pharmaceutical, and bio companies closely related to COVID-19 also showed remarkable results. Among 13 major medical, pharmaceutical, and bio companies that have announced earnings so far, 8 companies (62%) recorded 'earnings surprises' exceeding market expectations. Samsung Biologics maximized factory operation efficiency during the COVID-19 spread and posted its highest Q2 earnings.

On the other hand, large industries such as automotive, steel, finance, and construction struggled due to the impact of COVID-19. In particular, the earnings decline of automotive companies was evident. Among 15 automotive-related companies that have announced earnings so far, 12 companies (80%) saw Q2 earnings decrease compared to the same period last year.

Domestic leading automotive companies such as Hyundai Motor, Kia Motors, Hyundai Mobis, and Ssangyong Motor experienced worsened earnings. They bore the full brunt of the sharp drop in automobile consumption caused by COVID-19.

The steel industry also could not escape the COVID-19 shock. POSCO posted an operating loss for the first time on a separate basis in Q2. It was affected by decreased steel demand from upstream industries such as automotive and shipbuilding due to COVID-19. The finance sector also saw profitability decline in Q2, mainly centered on banks.

This content was produced with the assistance of AI translation services.