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Hello, Daily Stock subscribers. Let's review the key highlights of the Q1 earnings season, which officially kicks off this week.
Key Summary
Starting this week, major KOSPI-listed companies are scheduled to release their preliminary Q1 2026 earnings one after another.
As macro volatility has become extreme due to recent global geopolitical tensions, market attention is shifting to sectors with proven fundamentals.
In particular, with the KRW/USD exchange rate climbing above the 1,500 KRW mark, strong earnings are expected from securities stocks benefiting from the surge in trading volume and export consumer goods expecting FX gains.
We should consider the possibility of supply and demand dispersing from the existing market led by large-cap IT and auto stocks into financials and small-to-mid cap export stocks with clear earnings visibility.
Current Market Summary
As of today's (1st) close, the KOSPI index finished at 5478.70, and the KOSDAQ index closed at 1116.18.
While the NASDAQ index also closed at 21590.63, the KRW/USD exchange rate maintains an exceptionally super-strong level of 1500.30 KRW.
According to the Fear & Greed Index calculated in-house by Daily Stock, current market sentiment is significantly contracted.
KOSPI Fear & Greed is currently at Fear (31.3), 1 week ago Fear (33.5), 1 month ago Fear (20.5), and 3 months ago Greed (61.7).
NASDAQ Fear & Greed shows even greater anxiety, currently at Extreme Fear (14.7), 1 week ago Extreme Fear (18.2), 1 month ago Neutral (41.2), and 3 months ago Extreme Fear (19.6).
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Financial Analysis
One of the most prominent sectors in this Q1 earnings release calendar is undoubtedly the securities sector.
This is because brokerage revenues have increased significantly as the daily average trading value surged to around 45 trillion KRW during the steep rise of the KOSPI index since earlier this year.
Additionally, export consumer goods companies, such as K-beauty and agri-food, are also expected to see margin improvements driven by a record-breaking export boom in March combined with the 1,500 KRW exchange rate effect.
Below is a summary of the Q1 net profit consensus projected by major securities firms ahead of this earnings season.
| Major Securities Firm | Estimated Q1 2026 Net Profit | YoY Growth Rate | Key Earnings Drivers |
|---|---|---|---|
| Mirae Asset Securities | Approx. 886 billion KRW | Over +70% (Est.) | Increase in trading value and robust wealth management (WM) |
| Korea Investment Holdings | Approx. 560 billion KRW | Over +30% (Est.) | Recovery in brokerage and IB divisions |
| Kiwoom Securities | Approx. 390 billion KRW | Over +50% (Est.) | Surge in fee income based on retail market share |
| NH Investment & Securities | Approx. 320 billion KRW | Over +45% (Est.) | Operating profit leverage from surging trading volume |
Valuation
Despite record-level earnings forecasts, large-cap financial stocks within the KOSPI 200 currently remain in undervalued territory from a P/B (Price-to-Book ratio) perspective.
If strong Q1 earnings lead to capital expansion and ROE (Return on Equity) improvement, there is a possibility of further revaluation in tandem with the Value-up Program.
On the other hand, for small-to-mid cap export consumer goods like cosmetics, earnings expectations have already been priced into the stocks, resulting in somewhat elevated relative valuation multiples.
Therefore, whether the actual profit growth rates announced this week can meet the market's heightened expectations will likely be the key criterion for justifying their valuations.
Expert & Institutional Analysis
Financial investment industry experts predict that the combined Q1 net profit of the top five major securities firms will reach approximately 2.47 trillion KRW, recording an earnings surprise.
Such strong performance is interpreted as a result of frequent turnover by retail investors amid extreme market volatility, which maximized fee income.
However, institutional investors maintain a somewhat cautious stance regarding earnings continuity beyond the second quarter.
This is because foreign investors have recently shown a massive net selling position in the KOSPI spot market due to geopolitical risks and exchange rate burdens, making a contraction in trading volume inevitable if supply and demand withdraw in the future.
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Risk Factors
The most alarming factor is the concern over entrenched inflation triggered by the high exchange rate reaching 1500.30 KRW and the strength of international oil prices.
This could delay the Bank of Korea's benchmark interest rate cut to the second half of the year or later, consequently increasing the interest burden on corporations.
Additionally, the fact that the NASDAQ Fear & Greed Index indicates 14.7 (Extreme Fear) is a variable that could negatively impact foreign supply and demand in the domestic stock market.
Caution is required as a valuation discount across KOSPI large-cap stocks could deepen if the slowdown in macroeconomic indicators in major countries like the U.S. materializes.
Investment Perspective Summary
The Q1 earnings calendar starting this week suggests focusing on earnings-driven stocks proven by numbers rather than vague expectations.
Rather than betting on an overall index rise, a valid strategy could be compressing the portfolio into securities stocks with confirmed brokerage revenues or export consumer goods fully enjoying the exchange rate effect.
In particular, as the possibility of short-term profit-taking volume emerging immediately after earnings releases remains open, a conservative approach of confirming fundamental support lines rather than chase buying is recommended.
Above all, in a volatile market, each company's cash-generating ability and dividend capacity are judged to be excellent means of securing downside protection.
Investor Checkpoints Q&A
Q1. What is the biggest focal point of the Q1 earnings releases this week?
A1. With the earnings of large-cap export stocks already largely reflected in their stock prices, the key is to confirm the actual margin improvement scale of securities stocks benefiting from the trading volume surge and small-to-mid cap consumer goods gaining from FX margins.
Q2. What is the impact of the 1,500.30 KRW/USD exchange rate on the stock market?
A2. The plunge in the Won's value stimulates concerns about FX translation losses among foreign investors, which can act as a negative factor for KOSPI large-cap stock supply and demand. Conversely, it can be a distinct earnings improvement momentum for companies with a high export proportion, such as K-beauty or food and beverage, whose export value converted into Won increases.
Q3. Can the strong Q1 earnings of securities firms continue into Q2?
A3. The strong Q1 earnings were largely due to record-level trading volumes (around 45 trillion KRW daily average) derived from an overheated stock market phase. If the market's wait-and-see attitude deepens due to Middle East risks and trading volume plummets, Q2 earnings have the possibility of slowing down somewhat compared to Q1.
Q4. What do the current KOSPI and NASDAQ Fear & Greed Indexes suggest?
A4. The KOSPI is at 31.3 (Fear) and the NASDAQ is at 14.7 (Extreme Fear), meaning global investment sentiment is severely frozen. This suggests that the market is in a phase where it can overreact to even trivial bad news, maximizing volatility, and thus hasty directional betting should be avoided.
Q5. What risk does the direction of the Bank of Korea's benchmark interest rate pose to the stock market?
A5. If the super-strong dollar and oil price instability combine to stimulate import prices, early interest rate cuts by the Bank of Korea become virtually difficult. A prolonged period of high interest rates acts as a major factor suppressing the multiple expansion of the stock market by increasing corporate funding costs and reducing market liquidity.