From Hyundai Motor and LG Chem to Naver... The Leading Stocks' Earnings Season Officially Begins

Today, Major Market Leaders Hyundai Motor, Naver, and Others Announce Earnings
Strong Results Expected to Shift Market to Earnings-Driven Phase
"Even If Earnings Fall Short of Expectations, Optimism for Economic Recovery Will Sustain Upward Momentum"

[Asia Economy Reporter Minwoo Lee] The earnings announcements for the fourth quarter of last year from top market capitalization companies that have recently led the rising market, such as automobiles, secondary batteries, and the internet, were heavily concentrated this week (25th-29th). The prevailing outlook is that the upward trend at the beginning of the year will continue and shift into an earnings-driven market. Even if earnings are somewhat sluggish, it is analyzed that market expectations will persist for the time being as countries around the world, led by the United States, are pouring out economic stimulus measures.

According to the industry on the 26th, starting with Hyundai Motor, Samsung Biologics, and Douzone Bizon on that day, on the 27th, major large-cap stocks related to automotive electronic components that have led the recent rising market, such as LG Chem, Kia Motors, Samsung Electro-Mechanics, Hyundai Glovis, and Hyundai AutoEver, will also release their fourth-quarter results for last year.

Samsung Electronics, considered the 'big brother' of the domestic stock market, will announce its finalized fourth-quarter results on the 28th. In the preliminary earnings announcement on the 8th, it was revealed that consolidated sales reached 61 trillion won and operating profit was 9 trillion won. This represents a 1.87% increase in sales and a 25.7% increase in operating profit compared to the previous year. Along with the earnings announcement, a new shareholder return policy is expected to be announced, drawing market attention. Since the inheritance tax for the late Chairman Lee Kun-hee must be prepared, expectations for a 'record-high dividend' policy have grown. In addition, earnings from internet giant NAVER, Samsung SDI, and POSCO are also scheduled to be announced. On the following day, the 29th, SK Hynix, ranked second in market capitalization, and SK Innovation are set to announce their earnings.

As the earnings reports of large-cap stocks that have led the stock market are generally expected to be favorable, it is naturally anticipated that the market will transition into an earnings-driven phase. Haedoon Han, a researcher at SK Securities, explained, "Because last year was a special situation due to the COVID-19 pandemic, changes in estimates are also important. Industries such as transportation, IT, home appliances, steel, and automobiles have seen significant upward revisions in estimates compared to three months ago," adding, "These industries are highly attractive in terms of earnings, with net income estimates for the first quarter of next year also being revised upward."

There is also analysis that even if the earnings reports of large-cap stocks fall short of expectations, the driving force behind the stock market's rise will continue. This is because investors' attention is focused on the possibility of earnings improvement this year. The fact that Samsung Electronics' preliminary earnings announced earlier this month fell short of market expectations but its stock price rose is in line with this context.

In fact, as the number of domestic COVID-19 confirmed cases steadily decreases and the export economy recovers, expectations for economic recovery are growing. According to the Central Disease Control Headquarters, as of midnight the previous day, the number of new domestic COVID-19 cases was 354. Since the 18th, the number has decreased to a level fluctuating between 300 and 400. According to the Customs Service's provisional export-import status, exports recorded $28.2 billion and imports $28.6 billion up to the 20th of this month. These figures represent increases of 10.6% and 1.5%, respectively, compared to the same period last year.

So-eun Ahn, a researcher at IBK Investment & Securities, said, "After the U.S. government announced a $1.9 trillion stimulus package, additional support is also expected next month, and China is also expected to introduce consumption stimulus measures in March," adding, "Until additional stimulus measures, the base effects of economic indicators, and vaccine effects become visible, the market's expectations for profit recovery formed will not easily be broken."

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