The consensus estimate for fourth-quarter operating profit of KOSPI-listed companies is approaching 80 trillion won ($59 billion), with earnings expectations rising rapidly across the market. Improved performance in the semiconductor and electrical components sectors driven by expanded artificial intelligence data center investment is leading the overall profit upgrades for the KOSPI, while the securities industry's expanding structural revenue base is also lifting earnings expectations. Despite the spread of "AI bubble" concerns on Wall Street that have rattled Big Tech stocks, analysts expect Korean stocks to show differentiated strength based on their earnings performance.
According to financial data provider FnGuide, the consensus estimate for fourth-quarter operating profit of KOSPI companies stood at 78.999 trillion won as of the previous day. This represents a 70.31% increase from a year earlier and a 12.05% upward revision from estimates provided three months ago. As earnings visibility improves toward year-end, brokerage profit estimates are rising rapidly. The consensus for KOSDAQ companies' operating profit for the same period was estimated at 2.472 trillion won, up 77.33% year-on-year but down 8.18% from the estimate three months ago.
By sector, the electrical and electronics industry showed the most notable upward revisions. The fourth-quarter operating profit consensus for KOSPI electrical and electronics companies surged 46.65% from three months ago, marking the largest revision among all sectors. The securities sector also rose 10.19% over the same period, while general services increased 4.26%. This reflects expectations of improved profitability for securities firms amid the semiconductor industry recovery and stock market strength.
Companies in semiconductors, electrical components, and materials-parts-equipment that benefit from expanded AI data center investment dominated the top rankings for consensus upgrades. Samsung Electronics' (005930.KS) fourth-quarter operating profit consensus was revised up 79.75% from three months ago, followed by Korea Circuit (007810.KS) at 79.88%, Daeduck Electronics (353200.KS) at 65.72%, SK hynix (000660.KS) at 39.18%, Samsung Electro-Mechanics (009150.KS) at 27.36%, LG Innotek (011070.KS) at 24.47%, and ISU Petasys (007660.KS) at 20.17%.
Despite growing concerns about AI investment overheating on Wall Street, the earnings outlook for Korea's semiconductor sector remains optimistic. JPMorgan raised its target price for Samsung Electronics from 140,000 won to 160,000 won and for SK hynix from 700,000 won to 800,000 won. "Big Tech companies including Amazon, Microsoft, Google and Meta will significantly increase AI investment next year, and the hardware supply chains in Korea and Taiwan will be the biggest beneficiaries," JPMorgan said. "As on-device AI capabilities expand, smartphone and PC demand will also rebound, and average selling prices for DRAM next year will rise 57% from this year while NAND will increase 27%."
Although the overall market is showing correction trends, expectations for improved securities firm performance remain positive. The fourth-quarter operating profit consensus rose significantly from three months ago for Korea Financial Holdings (071050.KS) at 25.78%, Kiwoom Securities (039490.KS) at 22.38%, Samsung Securities (016360.KS) at 12.82%, NH Investment & Securities (005940.KS) at 8.18%, and Daishin Securities (003540.KS) at 30.32%. "The most important change in the securities sector is the launch of the Integrated Managed Account, a new product that can compete with bank deposits and savings," said Park Hye-jin, a researcher at Daishin Securities. "As large corporations' massive domestic investment plans increase funding demand, if securities firms establish themselves as major buyers of corporate bonds, they can expand ancillary transactions including retirement pensions and Cash Management Accounts."
Among KOSDAQ companies, earnings improvement expectations rose notably for semiconductor materials-parts-equipment, electrical components, and some biotech stocks. Gaonchips (399720.KQ) saw its operating profit consensus surge 276.92% from three months ago, the largest upward revision, followed by Sunic System (171090.KQ) at 267.17%, L&C Bio (290650.KQ) at 255.56%, TFE (425420.KQ) at 233.08%, and RFHIC (218410.KQ) at 34.76%.
