The 'Big Three' With Over 1,000% Operating Profit Growth... Stocks to Watch This Earnings Season [3Q Earnings Preview]

Three Companies Projected to Achieve Over 1,000% Operating Profit Growth
Potential for Rebound Remains for Firms Hit by Hacking and Other Setbacks

As market expectations for third-quarter earnings season, particularly in the semiconductor sector, continue to rise, some companies are now projected to post year-on-year operating profit growth rates exceeding 1,000%. Notably, secondary battery stocks, which have long suffered from a prolonged slump, are drawing attention as they are included on this list, raising hopes for a potential rebound.

The 'Three Musketeers' With 1,000% Operating Profit Growth... Is the Sun Shining on Secondary Battery Stocks?

The companies expected to show the steepest operating profit growth in the third quarter of this year are LG Chem, Hanwha Ocean, and POSCO Future M. According to FnGuide, all three are projected to see third-quarter operating profits increase by more than 1,200% compared to the same period last year. Out of 197 KOSPI-listed companies for which at least three consensus estimates have been provided, these are the only companies expected to achieve four-digit operating profit growth rates.

Among the three, LG Chem is expected to lead in terms of earnings growth. LG Chem's estimated third-quarter operating profit is 526 billion won, representing an approximate 1,524% increase year-on-year. Rival POSCO Future M is also expected to surpass market expectations with an operating profit of 18.1 billion won in the third quarter, up 1,221% from the same period last year. While LG Chem's net profit, which exceeded 1 trillion won in the third quarter of last year, is expected to plunge by about 78% to 220.1 billion won this year, POSCO Future M is projected to swing to a profit with net income of 10.7 billion won.

Such rosy forecasts are being hailed as much-needed relief for secondary battery and chemical stocks, whose share prices have been declining due to the prolonged slump in the petrochemical industry. Choi Younggwang, a researcher at NH Investment & Securities, stated, "Although the overall business environment remains weak due to factors such as the elimination of U.S. electric vehicle subsidies, LG Chem is expected to overcome the challenging conditions through a diversified business portfolio, stabilization of lithium prices, and expansion of cathode material production and sales." POSCO Future M is also expected to benefit from increased shipments of cathode materials and the exemption of U.S. tariffs on anode materials.

Hanwha Ocean, which has been at the forefront of the shipbuilding stock rally, is also well-positioned for the future. Despite ranking first in net foreign selling last month (585.2 billion won), causing its share price to stagnate, the proportion of sales from high-value-added vessels such as liquefied natural gas (LNG) carriers continues to expand. In August, the company was shortlisted for the Canadian navy's 60 trillion won Canadian Patrol Submarine Project (CPSP), which involves the procurement of 12 3,000-ton submarines, drawing significant market attention. Hanwha Ocean's third-quarter operating profit is expected to reach 356.2 billion won, up 1,292% year-on-year, fueling expectations that its annual operating profit could surpass 1 trillion won this year.

Stocks Hampered by Hacking and Tariffs... What Is the Key to a Rebound?

While expectations for the third-quarter earnings of KOSPI-listed companies are rising, some companies are facing grim prospects. Several are bracing for earnings shocks due to U.S.-imposed tariffs and hacking incidents. In particular, SK Telecom, which has been recognized for its solid performance and consistent dividends, is inevitably facing profit declines due to customer churn and penalty waiver costs. SK Telecom's third-quarter operating profit is estimated at 51.6 billion won, a 90% decrease year-on-year. Due to a hefty fine of nearly 134.8 billion won, net profit is expected to turn negative, with a loss of 32.6 billion won.

However, there is also optimism. Given that peers KT and LG Uplus have also been affected by hacking issues, some analysts suggest that SK Telecom, having already reflected all costs and negative factors, may be the only viable option for dividend investors seeking alternatives within the telecom sector. Kim Hongsik, a researcher at Hana Securities, commented, "After being exposed to endless negative news since April, SK Telecom's share price is expected to stabilize from October, with potential positive catalysts such as the third-quarter dividend for October to December and the announcement of a shareholder return plan for 2026." He added, "From the end of the year, we anticipate upward revisions to fourth-quarter earnings forecasts and inflows of passive funds, particularly from foreign investors."

Hyundai Motor, whose share price has risen only about 1% since the beginning of the year, is also facing tough conditions. The final signing of the Korea-U.S. tariff agreement has been delayed since late July, and the persistently high 25% tariff continues to weigh on both earnings and share price. Kim Gwiyeon, a researcher at Daishin Securities, explained, "Uncertainties regarding a potential second Trump administration and ongoing labor union issues are contributing to continued valuation discounts across the sector." Hyundai Motor's third-quarter operating profit is estimated to be 2.6747 trillion won, down 23.3% year-on-year, while Kia's is projected to fall 16.4% to 2.4095 trillion won.

Nevertheless, the securities industry believes that if the tariff issue is resolved, auto stocks could trigger a rebound. This optimism is supported by ongoing efforts to reduce material and processing costs and decrease U.S. export volumes to minimize tariff impacts, while global sales outside Asia remain robust. Kim Changho, a researcher at Korea Investment & Securities, emphasized, "Since the imposition of tariffs, Hyundai Motor and Kia have both increased their U.S. market shares compared to the same period last year and the previous quarter, making their differentiated competitiveness even clearer. It is now time to focus on their enhanced brand power and product quality."