20160406-三星证券-Perspectives_Weekly_1Q_earnings_season_checklist_20页_1mb

Samsung Market Strategy Summary

Core Content

This document outlines the market strategy and analysis for the Korean stock markets and global stock markets, focusing on the performance of sectors, operating profit forecasts, fund flows, and stock screening based on EPS forecast changes. It is prepared by Samsung Securities and highlights key insights for investors and analysts.

Main Points

1. MSCI Korea Operating Profit Forecast

• The MSCI Korea operating profit increased from KRW96.6t in 2014 to KRW112.3b in 2015, with a consensus forecast of a further increase to KRW123.8t in 2016.
• Cyclical stocks are expected to drive the full-year operating profit growth, with a forecast of KRW10.8t for the cyclical sector and KRW2.5t for the defensive sector.
• The shipbuilding sector is projected to transition from a loss of KRW3t in 2015 to an operating profit of KRW1.6t in 2016, although this is considered somewhat optimistic.
• The energy, chemicals, and steel sectors are expected to see profit hikes of approximately KRW1t each, but these forecasts are seen as potentially over-optimistic.

2. Sector Performance and Valuation

• Energy, shipbuilding, and construction sectors have shown strong earnings momentum, while software, insurance, and banking sectors remain sluggish.
• The MSCI Korea index has a forward P/E of 10.5 and a forward P/B of 9.6, with varying performance across sectors.
• The energy sector has a forward P/E of 9.8 and a forward P/B of 15.1, indicating relatively attractive valuations.
• The software sector has a high forward P/E of 27.1 and a forward P/B of 15.1, suggesting it may be overvalued.
• The utilities sector has a forward P/E of 5.4 and a forward P/B of 16.1, indicating strong fundamentals and low valuations.

3. Stock Screening: EPS Forecast Changes

• Large-cap stocks with significant EPS forecast changes include:

  • LG Display (EPS est change: +26.5% in 1 month, -57.4% in 3 months)
  • Samsung SDI (EPS est change: +11.4% in 1 month, +8.9% in 3 months)
  • Hyundai Heavy Industries (EPS est change: +9.2% in 1 month, +41.7% in 3 months)
  • Lotte Chemical (EPS est change: +7.8% in 1 month, +13.8% in 3 months)
  • Samsung Fire & Marine (EPS est change: -0.9% in 1 month, -11.0% in 3 months)
  • Kia Motors (EPS est change: -1.0% in 1 month, -11.1% in 3 months)
  • SK Hynix (EPS est change: -13.7% in 1 month, -32.4% in 3 months)

• Mid-sized-cap stocks with significant EPS forecast changes include:

  • Korean Air (EPS est change: +40.4% in 1 month, +16.9% in 3 months)
  • Doosan Infracore (EPS est change: +16.5% in 1 month, +29.9% in 3 months)
  • Samsung Heavy Industries (EPS est change: +9.7% in 1 month, -3.8% in 3 months)
  • Doosan Heavy Industries & Construction (EPS est change: +8.7% in 1 month, +26.6% in 3 months)

• Small-cap stocks with significant EPS forecast changes include:

  • Hanmi Semiconductor (EPS est change: +22.2% in 1 month, +40.6% in 3 months)
  • Doosan Engine (EPS est change: +19.1% in 1 month, -45.6% in 3 months)
  • SK Gas (EPS est change: +5.7% in 1 month, +17.2% in 3 months)

4. Fund Flows

• Global Fund Flows:

  • EMs (Emerging Markets) had a net outflow of USD608m last week, with a 4-week average of USD1,346m.
  • DMs (Developed Markets) had a net outflow of USD47,283m YTD, with a 4-week average of USD6,741,656m.
  • Total global fund flows amounted to USD2,576m, with a 4-week average of USD1,276m.

• Domestic Fund Flows:

  • Equity-type funds had a net outflow of USD348m last week, with a 4-week average of USD305m.
  • Domestic-invested funds had a net outflow of USD444m last week, with a 4-week average of USD370m.
  • Overseas-invested funds had a net inflow of USD96m last week, with a 4-week average of USD65m.
  • Mixed-type funds had a net inflow of USD58m last week, with a 4-week average of USD-2m.

Key Information

• The performance of cyclical stocks is crucial in determining the achievement of full-year operating profit forecasts for MSCI Korea.
• The shipbuilding sector is expected to show improvement, but the lack of offshore orders may lead to downward revisions in forecasts.
• The energy sector has shown strong earnings growth and relatively attractive valuations.
• Fund flows indicate a net outflow from EMs and a net outflow from DMs, with some inflows in overseas and mixed-type funds.
• Stock screening highlights both positive and negative EPS forecast changes across different market caps, providing insights into potential investment opportunities.