A new study has shown that Samsung Electronics and SK Hynix, the two major forces fueling South Korea’s stock market, will contribute 98% of the profit. Profit contribution means the percentage of a particular company’s share in the overall profit increase of all listed companies in the market.
As per a report from Heungkuk Securities on the 23rd, the projected total increase in operating profits for KOSPI 200 companies this year, since the end of last year, is 152.6 trillion South Korean won. Out of this, Samsung Electronics is expected to see an increase of 82.1 trillion South Korean won in operating profits, while SK Hynix is anticipated to have a rise of 67.3 trillion South Korean won. Together, the two firms are expected to contribute 149.4 trillion South Korean won to the overall profit growth, making up 97.9% of the total projected increase for the KOSPI 200. This highlights that the improvement in earnings among major domestic listed companies is largely driven by these two semiconductor leaders.
The share of the two companies in the index’s increase also accounts for almost half of the total. The KOSPI ended the previous year at approximately 4,200 points and has been on an upward trend since then. The index increased by 37.8% from the start of the year up to the 20th. During this time, Samsung Electronics and SK Hynix contributed roughly 32.5% and 17%, respectively, to the index’s growth based on market capitalization. Together, their contribution amounts to about 49.5%, nearly half. If the benchmark is extended to late June of the previous year, when the index’s upward movement truly began, their combined contribution increases to approximately 56.6%.
Market analysts generally anticipate that the trend fueled by semiconductors will remain active for a significant duration. This is due to ongoing global investments in AI-related equipment, which is expected to maintain the revenue growth of memory semiconductors throughout next year. Lee Young-won, a researcher at Heungkuk Securities, stated, “The substantial price hikes in DRAM semiconductors, primarily driven by HBM (High Bandwidth Memory), are the key factor significantly enhancing the profit projections for South Korean semiconductor companies. The imbalance between supply and demand in memory semiconductors indicates that the market will remain supplier-dominated for now.”
Several professionals within the securities sector have also estimated that the total operational profit of Samsung Electronics and SK Hynix is expected to surpass 500 trillion South Korean won in the coming year.
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