"Anxious About a Market Crash... Where to Invest Besides Semiconductors?" Experts Point to These Sectors [Weekend Money]

Sectors with Upward or Potentially Upward Profit Estimate Revisions
"Semiconductor Sector Requires Monitoring for Profit Growth"

Among the non-semiconductor sectors, securities, shipbuilding, and defense were identified as the industries with the highest growth potential for the first quarter of this year. There was also a suggestion that the semiconductor sector's earnings trend should be closely monitored.

Daishin Securities highlighted securities, shipbuilding, and defense as the non-semiconductor sectors most likely to deliver earnings surprises in the first quarter of this year.

Earnings forecasts for the securities and shipbuilding sectors have been steadily improving. For the securities sector, increased trading volume driven by a rising stock market and heightened volatility has raised expectations for improved performance. For the shipbuilding sector, the strengthening of U.S. energy security policies and growing demand for liquefied natural gas (LNG) carriers are key drivers of earnings growth. Although earnings estimates for the defense sector have not changed significantly, there is potential for profit growth if the impact of the Middle East war is reflected in performance estimates.

The KOSPI market, excluding the semiconductor sector, is expected to see gradual growth. The price-to-earnings ratio (PER) for non-semiconductor sectors stands at around 12 times, and the implied growth rate calculated using required return and price-to-book ratio (PBR) is 4%.

The implied growth rate for the semiconductor sector is -2%. Although profit estimates for the semiconductor sector are rising due to higher memory prices and the spread of artificial intelligence (AI) agents, this suggests that such profits may be difficult to sustain over the long term. In particular, considering the memory cycle, the current market is interpreted as anticipating a slowdown in earnings following the peak.

However, it remains necessary to continuously monitor the earnings levels of the semiconductor sector. As memory has been identified as a major bottleneck in the spread of AI agents, robust demand could allow for higher-than-expected profit levels to be sustained for longer.

Whether there will be upward revisions in profit estimates for the semiconductor materials, components, and equipment sector is also of significant importance. Since December of last year, profit estimate upgrades have been observed in this sector. Although the scale of these upward revisions has been limited compared to large-cap stocks, it is meaningful in that the trickle-down effect within the semiconductor sector has been reflected in the estimates.

Kwon Soonho, a researcher at Daishin Securities, stated, "The key in this year's first-quarter earnings season will be whether concerns about a peak-out in semiconductors can be alleviated and whether growth narratives in other sectors can be sustained," adding, "Ultimately, it is necessary to confirm whether recovery expectations continue to be valid for each sector."

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