Business likely to hit low in Q4, rebound next year: FN Guide

South Korea’s key listed companies are likely to emerge gradually from their longtime slump, with the majority expected to see a rebound in their business performance as early as this quarter, data showed Tuesday.

According to financial market tracker FN Guide, the aggregated operating profit of 217 key listed companies for the fourth quarter came to 27.87 trillion won ($23.36 billion) as of Monday.

This was down only 0.3 percentage point from the actual operating profit for the fourth quarter last year, indicating that this year’s final figure will be more or less unchanged from a year earlier, despite concerns about slow growth and external challenges.

Also, 78.3 percent of the companies analyzed expect to see their quarterly profit improve on-year as of end-December, triggering speculation that an uptrend may be on the way at last.

(Yonhap)

In recent years, global slow growth and prolonged US-China trade tension have weighed upon Korean companies.

As of the third quarter this year, the accumulated operating profit and net profit of benchmark Kospi-listed companies shed 39 percent and 45 percent respectively on-year, marking the steepest fall since 2011.

But with thawing signals from Washington and Beijing, along with the anticipated recovery of the semiconductor and display industries, top-tier companies are making their way back into the market.

Showing visible progress this year are LG Electronics and Hyundai Motor, which are expected to see their quarterly operating profit soar 275.3 percent and 120.3 percent on-year, according to Daishin Securities.

“The general downtrend in operating profits will last throughout the fourth quarter but its pace has started to slow down,” said analyst Cho Seung-bin.

“The profit level is likely to bottom out in this quarter and rebound around the first quarter next year.”

The market bellwether Samsung Electronics and runner-up chipmaker SK hynix will continue to see their quarterly operating profit shrink from a year earlier, 38.8 percent and 90.1 percent respectively, amid persistent challenges on the export front.

By Bae Hyun-jung (tellme@heraldcorp.com)