According to Rengo, a 5.28% wage increase, the largest increase in 33 years sinc

According to Rengo, a 5.28% wage increase, the largest increase in 33 years since 1991 as a result of the 1st count (771 companies) of Chuntu

Large companies rose 5.3 percent, small and medium-sized companies 4.4 percent, and non-regular workers 6.8 percent

The Bank of Japan is also likely to lift negative interest rates tomorrow, raising interest rates for the first time in 17 years since 2007. I look forward to spring for the Japanese economy after 30 years of winter

[Global] Continues to slow profit momentum in emerging economies. Hong Kong/China/Europe↓

[S. Korea] Chip earnings raise

■ Global earnings trends (MSCI, 12MF EPS)

* Global EPS Change Rate (1M)
: : -0.1%(DM: +0.0% > EM: -0.6%)

* Consensus Up Country (1M)
: Japan (+1.4%), India (+0.7%), and the United States (+0.2%)

* Consensus Downward Country (1M)
: Hong Kong (-1.9%), China (-0.9%), Europe (-0.7%)

* Consensus Upside Industry (1M, DM+EM)
: IT (+1.3%), Utilities (+0.5%), Industrial Goods (+0.3%)

* Consensus Downward Industries (1M, DM+EM)
: Materials (-2.8%), energy (-1.5%), and essential consumer goods (-0.7%)

■ Domestic Profit Trends and Valuations

* 1Q24 Change in operating profit consensus
: : +0.4%(1W), +1.3%(1M)

* 24-Year Operating Profit Consensus Changes
: : +0.4%(1W), +0.9%(1M)

* * KOSPI 12M Fwd. PER, 12M Trail. PBR
: 10.7x, 0.97x

■ Profit Trends by Industry in Korea (24-year operating profit 1W change rate)

▶ Industries that raise consensus: Semiconductors, displays, trading companies/capital goods

① Semiconductors (+1.8%, 24-year operating profit 1W change rate)
* Samsung Electronics (+1.4%) and SK Hynix (+3.1%) forecast positive earnings for 1Q24 due to higher DRAM prices and improved NAND shipments
* Lino Industrial (+6.9%) demonstrates 4Q23 earnings surprise. Profit forecast due to increased demand for high value-added products ↑

② Display (+0.8%)
* Deoksan Neorux (+3.4%) continues to raise its 24-year profit forecast on expectations of expanding OLED applications and recovering smartphones

③ Trading Company/Capital Goods (+0.6%)
* Hanwha Systems (+1.1%) expects to benefit from increased localization rate of major weapons systems. Expect mid- to long-term growth in space sector

▶ Consensus Downside: IT Hardware, Essential Consumer Goods, Energy, Enterprise, Chemistry

① IT Hardware (-0.8%, 24-year operating profit 1W change rate)
* LG Innotek (-0.5%) expects 24-year profit due to continued weak iPhone sales in China ↓. Q1 earnings are expected to be good due to higher optical solutions ASP
* SIMTECH (-13.2%) widens 4Q23 operating loss due to increased proportion of low-margin sales and one-off costs
* SoluM (-3.6%) adjusted its profit forecast due to weak 4Q23 earnings results. However, it expects to increase its earnings in 24 years due to solid ESL growth

② Essential consumer goods (-0.4%)
*Hite Jinro (-7.1%) is expected to see a decrease in shipments due to continued burden of eating out despite the increase in the shipping price of alcoholic beverages
* Nongshim (-1.0%) records 4Q23 earnings shock due to delayed raw material cost cuts and increased SG&A costs
* Earnings Forecast for CJ Freshway (-0.8%) and Lotte Well Food (-0.5%) ↓

③ Energy (-0.4%)
* HD Hyundai (-2.9%) reflects weak performance of Hyundai Oilbank in Q1
* On the other hand, S-Oil (+2.2%) is profit forecast due to solid oil demand and tight supply ↑

* Enter (-0.3%, YG Entertainment, SM, JYP Ent.), Chemistry (-0.1%, TKG Huchems, Hyosung Advanced Materials, Kumho Petroleum) downgraded

■ ■ Weekly Commentary
Earnings in emerging economies continued to be lowered (a one-month change of -0.6% in 12MF EPS). By country, Hong Kong, China and Europe are sluggish. Japan's profit forecasts continued to be upgraded. By industry, IT, utilities, and industrial goods sectors were good, and materials, energy, and consumer goods were sluggish. The profit momentum of consumer goods in the economy has also slowed.

Domestic companies' combined operating profit forecast for 2024 was raised by +0.4% compared to last week. This is due to the upward revision of the semiconductor industry, which has a high profit contribution. Both Samsung Electronics and SK Hynix have raised their profit forecasts.

In addition, profit momentum in display, trading company/capital goods industries was positive. On the other hand, IT hardware, consumer goods, energy, and entertainment industries saw a big downward revision in their performance.

Companies that have raised their 2024 operating profit forecast over the past week (excluding adding/deleting consensus) are Com2us, GaonCips, Intec Plus, Reno Industrial, PSK, Deoksan Neorux, SK Hynix, Nexteen, Boryeong, STI, S-Oil, Jin Air, Samsung Electronics, Dong-A ST, and Hanwha Systems.

Boundary sentiment has risen ahead of the FOMC in March next week. Attention needs to be paid to increased volatility in interest rates. After that, the sensitivity of stock prices and profits is expected to increase ahead of the first quarter earnings season, which will begin in April. In particular, the consensus for operating profit growth in the first quarter, excluding Samsung Electronics/SK Hynix/Korea Electric Power Corp., is -3.4% YoY, which has very low expectations for earnings growth. We need to maintain a positive view of the semiconductor industry, which has a relatively good profit momentum.

▶ Earnings Revision (week 3 of March)
https://han.gl/h4sqW

* Mirae Asset Securities Strategy/Quant Channel
t.me/eqmirae

I hope you have a comfortable weekend. Thank you.