[R&E] Korea Zinc's Operating Profit Jumps 175%; KOSPI Rises 1.43% Led by Shipbuilding, Defense, and Beauty Sectors' Performance

[Correction Notice] This article has been revised and republished after a post-publication review found a data reflection error.

[R&E: Research & Epoch] This is News Epoch's signature report that provides a view into a new era of investment through an integrated analysis of global financial data and domestic brokerage research.

Global Market Brief

The New York stock market closed lower the previous day, with all major indices falling. The Dow Jones Industrial Average dropped 0.63% to 49596.97p, the S&P 500 fell 0.38% to 7337.11p, and the NASDAQ declined 0.13% to 25806.2p. The Philadelphia Semiconductor Index fell 2.72%, revealing overall weakness in tech stocks. The New York Fed's April one-year consumer inflation expectations recorded 3.6%, up 0.2%p from the previous month, exceeding market expectations (3.5%). The resulting inflation concerns strengthened risk aversion sentiment. The US Dollar Index showed strength, rising 0.22% to 98.243.

Domestic Market Overview

Despite the decline in the New York stock market the previous day, the domestic stock market showed a differentiated trend on the last trading day, driven by earnings improvements in large-cap stocks. The KOSPI rose 1.43% to 7,490.05p, breaking its all-time high once again. In contrast, the KOSDAQ closed at 1,199.18p, down 0.91%. Even amidst global inflation concerns and a high-interest-rate environment, the robust first-quarter earnings of major domestic companies offset downward market pressure and supported investor sentiment. In particular, the domestic daily average trading volume was 109 trillion KRW on average from May 4 to 6, significantly exceeding the Q1 average (67 trillion KRW), and customer deposits in April reached 124.8 trillion KRW, a 13.1% increase from the previous month, proving that market liquidity is abundant.

Key Industry Issues and Insights

Korea Zinc (KOSPI: 010130) reported a consolidated operating profit of 746 billion KRW in the first quarter of 2026, up 175.2% year-on-year, exceeding the market consensus (656.3 billion KRW) by 13.7%. A 16% increase in silver sales volume and an increase in selling prices were the main drivers, with 70% of the revenue improvement attributed to the selling price effect. Amid the global strong raw materials phase, Korea Zinc's profitability is strengthening in the high-margin rare metals sector.

The remarkable progress of the shipbuilding and defense sectors also stands out. HD Hyundai Heavy Industries (KOSPI: 329180) posted a Q1 operating profit of 905.4 billion KRW, up 108.8% year-on-year, exceeding market expectations by 13.6%. HD Korea Shipbuilding & Offshore Engineering (KOSPI: 009540) also saw its Q1 operating profit increase by 57.8% year-on-year to 1.356 trillion KRW, surpassing market expectations by 14.8%. LIG Defense & Aerospace (KOSPI: 079550) also exceeded estimates with a Q1 operating profit of 171.1 billion KRW, up 56.1% year-on-year. These companies fully benefited from rising ship prices and an exchange rate effect that rose by about 15 KRW per dollar. HD Hyundai Marine Engine (KOSPI: 071970) gave a green light to its high-value-added business expansion by commencing deliveries of gas turbine blades.

In the consumer goods and bio sectors, global market expansion is the core growth driver. APR (KOSPI: 278470) saw its Q1 operating profit surge 179.0% year-on-year to 152.3 billion KRW. The overseas revenue share reached 89%, and US revenue grew by 250% year-on-year to 248.5 billion KRW, proving the global competitiveness of K-beauty devices. KT&G (KOSPI: 033780) posted an operating profit of 364.5 billion KRW, up 27.6% year-on-year, driven by a 40.6% growth in overseas tobacco sales and a 391% growth in overseas NGP sales. It also clearly demonstrated its commitment to shareholder returns by canceling all of its treasury shares. Celltrion (KOSPI: 068270) reported a Q1 operating profit of 321.9 billion KRW, up 115.5% year-on-year, and is enhancing development efficiency through the launch of new products and approval to reduce the number of clinical trial patients.

Market Signals

• Domestic stock market daily average trading volume: Recorded an average of 109 trillion KRW from May 4 to 6, a significant increase compared to Q1 (67 trillion KRW).

• Korea Zinc 1Q26 operating profit: Recorded 746 billion KRW, exceeding the market consensus (656.3 billion KRW) by 13.7%.

• APR 1Q26 overseas revenue share: Reached 89%, with US revenue increasing by 250% year-on-year to 248.5 billion KRW.

• New York Fed April one-year consumer inflation expectations: Reached +3.6%, up 0.2%p from the previous month, exceeding market expectations (3.5%).

• Previous trading day KOSPI close: Rose 1.43% to 7,490.05p, breaking its all-time high.

Epoch View: Investment Implications

Even in an environment where global inflation concerns and interest rate uncertainties in major countries persist, the domestic stock market maintained a solid trend based on robust corporate earnings. Companies in specific sectors such as defense, shipbuilding, raw materials, and beauty devices recorded earnings that exceeded market expectations, driving the differentiated upward trend of the domestic market. Abundant domestic market liquidity is also a factor solidly supporting this upward rally. As uncertainties in the external environment persist, companies' fundamental competitiveness and flexible market response strategies will be the key variables that determine the differentiated performance of the domestic stock market going forward.

This content was generated using News Epoch's proprietary AI algorithm, which tracks and analyzes public data from major domestic brokerage research centers and global financial media in real time. It is an objective summary based on collected data, and does not constitute an investment recommendation or solicitation for any specific stock.