Looking at the Q2 earnings outlook… Refinery company’s ‘laugh’, battery and electronics ‘laugh’

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The second quarter earnings forecasts of companies listed on the domestic stock market are coming out one after another in the stock market. As the battery and electronics stocks are expected to perform well, attention is also focused on the whereabouts of Samsung Electronics’ stock, which is locked in a box.

According to consensus compiled by securities companies on the 4th, operating profit for the second quarter of SK Innovation is expected to be 457.7 billion won, down about 9% from the previous quarter. S-OIL’s 2Q operating profit is also expected to decrease 22% QoQ to 488.5 billion won.

GS Caltex and Hyundai Oilbank are also expected to show a similar pattern.

Domestic refiners achieved earnings improvement in the first quarter as their refining margins rebounded to the US$2-3 range due to the recovery of the novel coronavirus infection (COVID-19) and rising oil prices. However, compared to the recent surge in international oil prices, the recovery of refining margins has been slow, so 2Q earnings are expected to slow down.

On the other hand, batteries and electronics are expected to perform well. Samsung SDI’s sales in the second quarter were 3.3709 trillion won and operating profit was 252.7 billion won. This is an increase of 31.7% and 143.4%, respectively, compared to the same period last year. In addition, Samsung SDI is expected to lead earnings in the third quarter as its mid-to-large battery business for electric vehicles succeeded in turning to black.

However, LG Energy Solution, which had an issue with ESS (energy storage system) battery recall provision, is expected to incur an operating loss of at least 8 billion won to as much as 200 billion won in 2Q. However, it is not expected to have a significant impact on the annual performance.

Kang Dong-jin, a researcher at Hyundai Motor Securities, said, “Even if 400 billion won in provision is reflected in the second quarter, LG Energy Solution will generate more than 1 trillion won in operating profit this year.”

A view of the LG Twin Towers in Yeoui-daero, Seoul. yunhap news

Samsung Electronics’ 2Q consensus was 61.5 trillion won in sales and 11.3 trillion won in operating profit. This is an increase of 16% and 39%, respectively, compared to the second quarter of last year.

It is analyzed that Samsung Electronics’ 2Q earnings were driven by the semiconductor (DS) operating profit exceeding 6 trillion won.

As a result, interest is growing whether the share price of Samsung Electronics, which has been locked in the 80,000 won box, will gain momentum. Samsung Electronics closed the trade at 80,000 won on the KOSPI on the 2nd, down 0.12% from the previous trading day.

Samsung Electronics’ stock price rose to 96,800 won during the day at the beginning of this year, but it stayed in the range of around 80,000 won due to bad factors such as fatigue from a short-term surge and the shutdown of US semiconductor consignment factories.

However, as Samsung Electronics’ operating performance was expected, the average target price of Samsung Electronics at 21 securities companies was presented at 102,524 won as of the 2nd.

Meanwhile, 484 (20.3%) of the 2,833 stocks (excluding new listings) listed on the KOSPI and KOSDAQ that achieved the new price (based on the closing price) in the first half of the year.

In addition, the KOSPI 200 Volatility Index (VKOSPI), also called the ‘fear index’, closed at 13.74 on the 2nd, recording the lowest level since January 20 (13.64) of last year, before Corona 19.

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