Strong Growth
As KOSPI-listed companies whose fiscal year ends in December showed a strongest growth in terms of performance in the first quarter this year, their annual net profits are expected to reach some 140 trillion won (US$125.11 billion). Accordingly, the KOSPI index, which continuously hits another record high, will rise even further.
According to data by market tracker FnGuide as of May 28, the estimated net profit of all 536 listed firms on the first-tier Korea Composite Stock Price Index (KOSPI) came to 143.6 trillion won (US$128.32 billion). The figure climbed up by 16.68 trillion won (US$14.91 billion), or 13.14 percent, from 126.91 trillion (US$113.41 billion) of the projection earlier this year.
Securities companies raised the annual net profit forecast as the firms posted robust earnings in the first quarter of 2017. The combined net profit of the KOSPI-listed companies whose fiscal year ends in December amounted to 32.19 trillion won (US$28.77 billion) in the first quarter, up 35.77 percent from the same period a year earlier. As their net profits in the first quarter, which is usually the off season, reached a record high, the listed companies are expected to post more than 140 trillion won (US$125.11 billion) in net profit this year.
In addition, their sales and operating profits increased by 8.35 percent and 25.3 percent, respectively, in the first quarter, showing a growth in terms of both external size and internal stability. It seems positive considering the fact that the listed companies got out of “recessionary surplus” in which sales decrease while profits grow.
Therefore, securities firms predicted that the annual sales and operating profits of the KOSPI-listed companies will reach 1922.54 trillion won (US$1.72 trillion) and 190 trillion won (US$169.79 billion), respectively, this year. Compared to the January projection, the figures were up 0.91 percent and 11.22 percent.
Lee Kyung-soo, head of the research center at Meritz Securities, said, “Even considering the fact that the forecasts are set slightly higher with expectations of analysts at securities firms, I have no doubt that the listed companies will post more than 140 trillion won (US$125.11 billion) in net profit this year. If the combined net profits stands at 140 trillion won (US$125.11 billion) this year, it means a 39 percent increase on-year. When applying 11 times of price earnings ratio (PER), it is the level that the KOSPI index can reach 2550 to 2600 this year without difficulty.”