'Performance Outlook Continues to Decline'… Samsung Electronics and SK Hynix in Downtrend

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] Samsung Electronics and SK Hynix are showing a downward trend in the early trading session. SK Hynix is hitting a 52-week low amid deficit forecasts.

As of 9:57 a.m. on the 3rd, Samsung Electronics is trading at 54,700 KRW, down 1.44% from the previous day. At the same time, SK Hynix is down 2.25% at 74,000 KRW, breaking the 74,700 KRW mark on the 29th of last month and hitting a 52-week low.

The reason for the weakness is the continuous downward revision of earnings estimates. Concerns stem from the semiconductor industry's downturn, which is expected to cause a larger-than-anticipated profit decline.

On this day, Kim Rok-ho, a researcher at Hana Securities, stated, "Samsung Electronics' Q4 2022 revenue is expected to fall 12% year-on-year to 67.3 trillion KRW, and operating profit is forecasted to plunge 60% to 5.6 trillion KRW," adding, "The consensus has been rapidly revised downward recently, and the actual results are expected to fall below this consensus."

Researcher Kim explained, "The main cause of the earnings decline is a sharp drop in demand," noting, "Both shipments and prices of semiconductors and smartphones are expected to fall short of previous forecasts, resulting in a significant downward revision of earnings." He continued, "Samsung Electronics' 2023 revenue is projected at 260.3 trillion KRW, and operating profit at 20.8 trillion KRW, representing decreases of 13% and 53% year-on-year, respectively," analyzing, "The demand forecast has been conservatively revised downward compared to previous estimates, and the resulting price decline is larger than expected, steepening the earnings downgrade."

[Image source=Yonhap News]

According to FnGuide, SK Hynix's consensus operating loss for Q4 last year is expected to be 766.3 billion KRW, marking a return to deficit. The consensus operating loss for Q1 this year is estimated to nearly double to 1.29 trillion KRW. The deficit trend is expected to continue into Q2 this year.

Samsung Electronics' consensus operating profit for Q4 last year was recorded at 7.2102 trillion KRW, down 48% from the same period last year. The consensus operating profit for Q1 this year is 5.9254 trillion KRW, a 58.04% decrease.

Currently, Samsung Electronics is experiencing net selling by foreigners and institutions amounting to 2.306 billion KRW and 1.4522 billion KRW, respectively. SK Hynix is also seeing net sales by foreigners and institutions of 52.3 million KRW and 435.4 million KRW, respectively.

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