Shinhan Investment & Securities said on the 15th that KOSPI operating profit for the first quarter of this year is expected to post a surprise that exceeds the consensus (market forecast average) by more than 20%.
Shinhan Investment & Securities forecast KOSPI operating profit for the first quarter of this year at 166 trillion won. That is 20.3% higher than the consensus. It projected operating profit excluding semiconductors at 64.9 trillion won, which would be 2.7% above the consensus.
Lee Jeong-bin, an analyst at Shinhan Investment & Securities, said, "Since semiconductors account for 60% of total operating profit, the contribution to the surprise is decisive," and noted, "After Samsung Electronics' first-quarter earnings surprise, the 12-month forward net income consensus for semiconductors has quickly increased to 430 trillion won."
Lee added that the focus now is on areas where an earnings surprise and an upward revision to earnings per share (EPS) occur simultaneously even excluding semiconductors.
Estimating operating profit surprise by sector, Lee said double-digit or higher beats to consensus appear in the ▲energy ▲financials ▲IT sectors.
Shinhan Investment & Securities projected first-quarter operating profit at 4.9 trillion won for energy, 19.7 trillion won for financials, and 101.2 trillion won for IT.
"Energy, IT, and financials are areas where both the strength of the surprise and the stock price gains are high," the analyst said, adding, "Earnings expectations have already been priced in."
The same pattern is confirmed by industry, with strong operating profit surprise intensity centered on energy, securities, semiconductors, and IT appliances. In particular, the securities industry is expected to post record results, with operating profit estimated at 5.9 trillion won, 27.8% above consensus.
"Expansion in brokerage fee revenue is the main driver," the analyst said, adding, "Large securities firms such as Samsung Securities are likely to beat market expectations in terms of earnings level."
From a bottom-up perspective, stocks with a high probability of a surprise include SK Innovation, S-Oil, Samsung Electronics and SK hynix, Samsung Securities, and Korea Investment Holdings. In particular, SK hynix's probability of a surprise is estimated at 81.1%.
However, Lee pointed out that the issue is the continuity of stock prices. The market is sensitive to geopolitical risks, and oil prices and exchange rates are elevated due to the Middle East war.
"The earnings direction remains valid, but the path is unstable, with daily volatility widening and short-term noise having a greater impact," Lee said. "Even so, stock prices ultimately converge to earnings."
Lee added that the key is not new ideas but whether the existing momentum continues. With variables such as the price ceiling policy and oil prices, a strategy focusing on semiconductors and securities, which are more likely to sustain stock price gains than energy with uncertain earnings sustainability, is effective.