|
December 01, 2009
|
||||
Kim forecast Korean companies’ earnings per share - an indicator of profitability - would rise 28 percent in 2010, second-highest among Asian markets next to Taiwan. The figure rose 56 percent so far this year, the highest in Asia. “Samsung Electronics and LG Electronics now have a combined market share of more than 50 percent in the global LCD [liquid-crystal display] market, with a more than 20 percent margin,” Kim said during a press conference in Seoul yesterday. Local builders now make nearly 60 percent of their overseas earnings in the Middle East, with operating margins of over 10 percent, while Japanese firms are forced to look to less profitable markets, Kim said. The analyst also cited Hyundai-Kia Automotive Group, which saw its U.S. market share grow from less than 2 percent in 2000 to almost 8 percent this year. Investors and analysts here and abroad, however, have downplayed Korean exporters’ better-than-expected performance amid the global recession, crediting the stellar earnings to the weak won, which makes Korean goods less expensive in overseas markets. But Kim said less than one-third of recent earnings by Korean exporters were due to the currency effect. “I see many Japanese companies struggling to compete against Korean firms point their fingers to the currency swing, saying such earnings will evaporate if the won strengthens again,” said Kim. But Korean tech makers and other manufacturers are rapidly expanding their presence in high-end markets, where consumers do not necessarily buy solely based on cheap prices, he said. “We no longer see the cheap, bargain brand image of Korean products,” said Kim. “I think Korean companies will keep producing operating profit even when the won-dollar rate falls to the 1,150 or 1,100 level, thanks to their enormous efforts in marketing to get rid of this cheap brand image and to their cost innovation to increase their immunity against currency swings.” However, Kim did warn that lagging demand at home due to widening income gap will make Korean companies more dependent on exports and more vulnerable to changes in demand overseas. By Jung Ha-won [hawon@joongang.co.kr] |
|
