The earnings outlooks for Samsung Electronics and SK hynix were successively revised down due to the impact of won appreciation, with the currency impact seen as significant.
The third-quarter earnings outlooks for South Korean semiconductor giants Samsung Electronics and SK hynix were successively revised down in reports issued by financial institutions. Citi lowered its estimates of third-quarter operating profit to KRW 7.4 trillion for SK hynix and KRW 10.41 trillion for Samsung Electronics, and also revised its target prices.
The won reversed course from a weakening trend, and the won-dollar exchange rate extended its decline. The rate had fallen approximately 12% from early July, reaching a 13-month low. This has become a factor driving revisions to companies’ earnings forecasts. Won appreciation has been cited as a factor behind the downward revisions.
While some in the securities industry believe revisions to earnings forecasts are unavoidable in the early stages of won appreciation, others say the semiconductor growth trend itself remains intact. Kiwoom Securities and LS Securities lowered their target prices for Samsung Electronics and SK hynix.
Woori Bank lowered its downside target for the won-dollar exchange rate to KRW 1,340 and forecast that the exchange rate would continue to decline through early next year, supported by expectations of a recovery in exports. The market is closely monitoring future currency movements and earnings trends in the semiconductor industry.