Samsung Electronics (005930) shares closed higher on July 6, one day ahead of its second-quarter preliminary earnings release, as investor expectations and concerns intersected. Market analysts project consolidated operating profit for Q2 to reach approximately 85 trillion won (approximately $55.5 billion), a staggering increase of more than 1,700% compared to the same period last year. Attention is now focused on whether this earnings report can serve as a catalyst for a rebound in South Korea’s stock market, which has recently entered a correction phase.
On July 6, Samsung Electronics closed the regular session at 318,000 won (approximately $207.51), up 2.75% (8,500 won) from the previous trading day. The stock briefly surged to 325,000 won (approximately $212.08) during intraday trading before paring some gains. In after-hours trading, as of 7:52 PM, the stock continued its upward momentum, rising 3.07% to 319,000 won (approximately $208.17).
The upward movement in the stock price is interpreted as market anticipation building ahead of Samsung Electronics’ Q2 preliminary earnings disclosure. According to Yonhap Infomax, the consensus for Samsung Electronics’ consolidated Q2 operating profit stands at 84.58 trillion won (approximately $55.2 billion), representing an increase of over 1,708% year-over-year. Some securities firms have presented even higher estimates. Meritz Securities on this day forecast Samsung Electronics’ Q2 operating profit at 90.1 trillion won (approximately $58.8 billion), and analyzed that excluding provisions for semiconductor special performance bonuses agreed upon between labor and management, actual operating profit could surpass 100 trillion won (approximately $65.3 billion).
Market estimates for the special performance bonus provisions range from a minimum of 19 trillion won (approximately $12.4 billion) to a maximum of 25 trillion won (approximately $16.3 billion). This is considered a key variable in the upcoming earnings release. However, with assessments emerging that the company’s actual profit-generating capacity has already exceeded the 100 trillion won threshold when excluding these provisions, this earnings report is expected to serve as an opportunity to demonstrate the fundamental strength of South Korea’s semiconductor industry to global markets, beyond just the headline numbers.
Following Samsung Electronics, SK Hynix (000660), which is scheduled to report its Q2 earnings later this month, is also expected to post record-breaking results. Market analysts forecast SK Hynix’s Q2 revenue at 83 trillion won (approximately $54.2 billion) and operating profit at over 64 trillion won (approximately $41.8 billion). This represents an approximately 650% surge year-over-year, with the operating profit margin projected to reach 77%. The earnings are analyzed to have been driven by expanding memory demand amid the artificial intelligence investment boom and rising general-purpose memory prices.
The combined Q2 operating profit of major listed companies in South Korea is estimated at 206.85 trillion won (approximately $135.0 billion), a 32% increase from the 156.32 trillion won (approximately $102.0 billion) recorded in Q1, buoyed by the sustained high prices of memory semiconductors. Samsung Electronics and SK Hynix are expected to account for a significant portion of the total profit increase.
Yang Il-woo, an analyst at Samsung Securities, commented, “Despite the recent high volatility, the likelihood of a stock market rally resuming with the earnings season as a catalyst is high.” He explained, “This is because in most earnings releases, if revenue growth is solid and only one-time costs have increased, the market tends to interpret the earnings announcement as a resolution of uncertainty.” He added, “With international oil prices remaining stable and U.S. corporate bond spreads also maintaining stability, the pace of global liquidity expansion is very stable, but the stock market is not reflecting this due to contracted investor sentiment.” He forecast that “the divergence between fundamentals and stock prices will narrow through the global corporate earnings season.”
Meanwhile, foreign investors have continued their net selling streak on Samsung Electronics for 12 consecutive trading days. On this day alone, they net sold over 640 billion won (approximately $417.6 million) worth of shares. Some investors expressed expectations on online communities, stating that “earnings need to come out strong to curb foreigners’ desire for profit-taking,” while simultaneously voicing anxiety, noting that “the day after earnings releases, stocks usually crash.”
Additionally, SK Hynix’s American Depositary Receipt (ADR) listing scheduled for July 10 is also cited as a variable that could influence investment sentiment. The ADR listing is expected to enhance accessibility for global investors and could serve as a catalyst for foreign capital inflows, with the market anticipating it will provide momentum to once again drive South Korea’s stock market, which has been trapped in a recent correction phase.
Samsung Electronics’ earnings release marks the starting signal for the full-fledged Q2 earnings season and is expected to be a watershed moment that could quell market pessimism about the semiconductor industry and prove that the ‘super cycle’ remains in progress.