By Kim Yoo-chul
Staff Reporter
Convincing first-quarter performances by leading blue-chip companies in the technology, auto and shipbuilding sectors are further strengthening investor confidence.
Company executives and analysts have no big questions over a bullish run in earnings throughout the remainder of the year as the global economy continues to recover.
Demand from developed and developing markets, and corporations is expected to fuel purchases of consumer products such as digital devices and cars.
Korea is home to top-tier makers of memory chips, used in products such as PCs, smartphones and digital cameras. The nation is also home to the world's top shipyard Hyundai Heavy and well-known carmaker Hyundai Motor.
On Thursday, Hynix Semiconductor ― the world's No. 2 producer of memory chips after Samsung Electronics ― reported its biggest quarterly profit in more than three years after demand for personal computers and a memory chip shortage drove up prices.
Referring to "healthier" chip price moves amid tight supply and strong demand, its chief financial officer (CFO) Kim Min-chul said the company is mulling over more investment than its earlier commitment of 2.3 trillion won.
The Icheon, Gyeonggi Province-based memory chip producer posted a 799 billion won consolidated operating profit for the first three months of this year, while the quarterly net profit was 822 billion won ― a major turnaround from a net loss of 1.18 trillion won year-on-year, the company said in a regulatory filing.
Sales more than doubled to 2.82 trillion won from 1.31 trillion won the year before.
"The average price of DRAM chips will continue rising in the second-quarter and a price decline later in the year will be limited. A significant growth in supply will structurally be limited," Kim told analysts during a conference call, adding NAND flash memory shipments will rise sharply in the second quarter despite falling prices.
Hynix, which supplies its flash memory chips to Apple for its iPods and iPhones and mobile DRAM chips for iPads, earlier said the maker was meeting just 60 percent of demand from bigger PC makers.
LG Display, another technology powerhouse has clinched highly lucrative quarterly results during the January-March period.
The company, which sells flat-screens, used in everything from handsets to TVs, swung its operating profit to 789 billion won from a loss of 317 billion won year-on-year.
The quarterly net profit was 648.6 billion won ― a turnaround from a loss of 346.6 billion won during the same period, it said in the filing.
Sales for the quarter were 5.88 trillion won. The figures are on a consolidated basis, an international accounting measurement including performances of its all overseas units.
Senior company spokesman Park Sang-bae said the demand for LCD panels used in monitors and notebooks was strong, focused in developed markets.
"The demand for LCD-embedded consumer products is expected to rise in the second quarter helped by big sports events such as the World Cup," its CFO Jeong Ho-young said.
Good results mean a stable financial structure. As of the end of March, LG Display had 3.144 trillion won in cash-equivalent assets, while its debt ratio was 97 percent, according to the company.
Amid the encouraging outlook, LG Display is planning to step up its "business transformation" efforts. CEO Kwon Young-soo said the company will invest 250 billion won in next-generation OLED panels and introduce a 30-inch product for TVs in the latter part of 2011.
"We will become the top maker of electronic paper. For sustainable growth, LG Display will strengthen ties with overseas partners ― Suzhou Raken Technology and L&T Display Technology," Kwon was quoted as saying in a separate press release.
Hyundai Motor and Hyundai Heavy Industries (HHI) have joined the ranks of their IT peers to strike a record profit during the quarter on improved macroeconomic signals.
Hyundai said its net profit hit a record high in the first quarter of 1.13 trillion won ― five times higher than its net profit of 225 billion won in the same period last year.
Quarterly sales rose 40 percent to 8.42 trillion won from 6.03 trillion won a year ago. A company spokesman Ki Jin-ho said the net profit figure was an all-time high on a quarterly basis.
"Strong performances in China and India have helped us. Despite the won's strength, Hyundai is positive on posting a stable profit for the whole of this year with rising demand for cars," according to Ki.
The world's top shipbuilder HHI has also reported a record quarterly operating profit of 880 billion won, while net profit was an all-time quarterly high of 926 billion won on sales of 5.3 trillion won.
"Amid the economic recovery, the demand for sea plants and steady contracts for value-added ships helped us," spokesman Kim Kwang-kook said, adding a fall in the cost of raw materials was backing this.