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KOSPI-listed firms' net profits top 100 tln won in 2016: analysts

All News 10:12 January 05, 2017

SEOUL, Jan. 5 (Yonhap) -- South Korean companies listed on the country's main KOSPI market are estimated to have reaped a record net profit of more than 100 trillion won (US$84 billion) in 2016, market analysts said Thursday.

But it was mainly attributable to cost-cutting and other belt-tightening measures rather than a sharp increase in sales, they pointed out.

NH Investment & Securities Co. said the combined operating profits and net profits of the KOSPI-listed firms last year will likely exceed 150 trillion won and 100 trillion won, respectively.

Many other brokerage firms also estimated their aggregate net profits will reach 95-100 trillion won.

Korea Investment & Securities Co. put the figure at 107 trillion won.

According to local financial data provider FnGuide, top cap Samsung Electronics Co. posted an estimated 28.3 trillion won in its operating profit in 2016, up 7.2 percent from a year earlier.

Samsung's estimated operating profit in the first quarter jumped 35 percent on-year to 8.29 trillion won.

The operating profit of Naver, the dominant Internet portal service provider, is estimated to have expanded 47 percent to 1.1 trillion won, with those of the state-run Korea Electric Power Corp. and Hyundai Mobis Co., a major automotive parts supplier, climbing 17.4 percent to 13.3 trillion won and 5.4 percent to 3.9 trillion won, respectively.

An image of South Korea's financial and industrial markets (Yonhap)

On the other hand, global chipmaker SK hynix Co. saw its operating profit shrink 43.4 percent to 3 trillion won.

Hyundai Motor Co. also recorded a 9.9 percent fall to 6.2 trillion won, while SK Telecom Co. dropped 4.2 percent to 1.5 trillion won.

A market consensus is that many of the top 20 KOSPI firms in terms of market capitalization improved their earnings last year.

"Due to the increase in operating profits, there is growing corporate valuation charm," said Hwang Young-key, head of the Korea Financial Investment Association. "But the growth trend in operating profits without sales growth poses a big threat to the financial market."


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