The Cost of a Stronger Won

1 · BENCHMARKS

One exchange rate, three earnings channels

How can a stronger won still help automaker earnings? The answer is the benchmark you choose.

Q3 average USD/KRW fell 5.3% from Q2, but its Q3 average was still 2.7% higher than a year earlier. The rate did not move below 1,400 until after August 21, so the stronger won was only partly reflected in the quarterly average (Figure 1).¹

Against brokerage assumptions, the comparison flips. Daishin Securities had previously assumed 1,520, versus an actual Q3 average of 1,422. The same $100 of revenue therefore translates into more won than a year ago, but less than the broker had modeled (Table 1).^{1, 2}

TABLE 1

The same $100 of revenue produces a different won figure depending on the benchmark

Illustrative calculation · Exchange rates rounded

Benchmark	Exchange rate	Revenue in won
Q3 2025	1,385	KRW 138,500
Q3 2026	1,422	KRW 142,200
Previous estimate (Daishin)	1,520	KRW 152,000

Q3 2026 is 2.7% above Q3 2025, but 6.4% below the previous assumptionSource: Daishin Securities · Snowshagal calculations^{1, 2}

Three ways FX reaches earnings

There are three: the Average rate used to translate dollar revenue into won; the Quarter-end rate used to remeasure foreign-currency liabilities; and the gap between the exchange rate when raw materials were purchased and when the finished product was shipped. The three channels hit earnings at different times (Table 2).

For the quarter-end channel, this note focuses on the translation of automakers’ foreign-currency warranty provisions. Where FX translation gains or losses appear in the accounts depends on the company and the item.

TABLE 2

Three channels through which FX reaches earnings

Channel	What changes	Q3 setup
Average rateQuarterly average	Won value of dollar revenue · Actual revenue also depends on volume and dollar pricing	1,422 · YoY +2.7%, QoQ −5.3%¹
Quarter-end rateQuarter-end	Won value of foreign-currency liabilities such as warranty provisions · A lower USD/KRW rate reduces the won value and can create a translation gain	1,358 · QoQ −11.9% · Hyundai Motor and Kia each hold roughly KRW 5–6tn of dollar-denominated liabilities, by Daishin Securities’ estimate¹
Raw-material timing lagPurchase date vs. shipment date	Margins compress when materials bought at a high USD/KRW rate are sold after the won has strengthened · The effect appears with an inventory-cycle lag	LG Innotek’s optics business is the example cited by Yuanta Securities³

Part of the “miss” is an FX-assumption issue

Some earnings misses reflect an exchange-rate assumption that proved too high. Hana Securities cut its Samsung Electronics forecast after revising its FX assumption and said a downgrade to SK hynix—whose Q3 model used 1,500—was also unavoidable.

The estimate cut is entirely FX-driven, not a change in fundamentals.
Hana Securities Semiconductor & Components Weekly · October 6⁷

In Q4, the year-on-year comparison reverses. Under Daishin Securities’ 1,360 assumption, the quarterly average would be 6.1% below Q4 2025’s 1,448. In Daishin’s words, it would be the first year-on-year decline in the average rate in 12 quarters, since Q4 2023 (Figure 2).¹

FIGURE 2

Q4 assumption: the average USD/KRW rate falls below a year earlier for the first time in 12 quarters

YoY change in quarterly average USD/KRW (%) · 4Q26E uses Daishin Securities’ 1,360 assumption (hatched)

If the early-October level around 1,340 persists, Q4 would be roughly −7.5% YoY (Snowshagal calculation)Source: Daishin Securities, Investing.com · Graphic: Snowshagal^{1, 2, 4}

2 · AUTOS

What the +KRW 980bn FX contribution actually means

Daishin Securities estimates Hyundai Motor’s Q3 operating profit at KRW 2.54tn, almost unchanged from KRW 2.537tn a year earlier. The headline is flat, but the bridge suggests FX gains offset much of the pressure from volume and costs.^{1, 5}

In Daishin Securities’ year-on-year bridge for the automotive division, FX is the largest positive contributor. The average-rate effect is +KRW 230bn and the quarter-end effect +KRW 750bn, for a combined +KRW 980bn by our calculation. Lower tariff burden adds +KRW 570bn, while volume/mix (−KRW 1.0tn) and costs (−KRW 400bn) offset those gains (Figure 3).^{1, 2}

FIGURE 3

FX is the largest positive item in Daishin’s Q3 earnings bridges for Hyundai Motor and Kia

Year-on-year operating-profit drivers estimated by Daishin Securities (KRW tn) · FX factors and Other factors

The factors do not reconcile exactly to the change in operating profit (Appendix 1) · Tariff burden reflects a reduction from 25% to 15% (Hanwha Investment & Securities) · FX totals calculated by SnowshagalSource: Daishin Securities, Hanwha Investment & Securities · Graphic: Snowshagal^{1, 2, 8}

The tariff item appears to reflect the lower burden from a rate of 15%, down from 25% in Q3 last year; the tariff rates are from Hanwha Investment & Securities.⁸ The five factors sum to +KRW 150bn, about KRW 109bn more than the automotive division’s +KRW 41.3bn change in operating profit. Daishin’s report does not explain the gap, so we leave it unreconciled (Snowshagal calculation; Appendix 1).^{1, 2}

COMMON MISREAD

Year-on-year improvement is not this year’s profit

This does not mean Hyundai Motor generated KRW 750bn of translation profit in Q3 this year. The quarter-end contribution of +KRW 750bn is best read as the year-on-year swing between last year’s translation loss and this year’s translation gain. Quarter-end USD/KRW rose 3.4% in Q3 2025 but fell 11.9% in Q3 2026 (Snowshagal calculation).^{1, 2}

So subtracting KRW 750bn from this year’s profit would not reveal “core” earnings. If last year carried a KRW 150bn translation loss and this year a KRW 600bn translation gain, the year-on-year improvement is KRW 750bn—but the amount embedded in this year’s profit is KRW 600bn. These are illustrative numbers only (Table 3).

TABLE 3

Year-on-year improvement is not the same as the amount embedded in this year’s profit

KRW bn · Illustrative figures used only to show the mechanics

Item	Amount
Q3 2025 quarter-end translation P/L	−150
Q3 2026 quarter-end translation P/L	+600
Year-on-year improvement	+750
Amount embedded in this year’s profit	600

Hyundai Motor’s actual Q3 translation effect is not yet known

Broker estimates also differ materially. Hanwha Investment & Securities expects the FX-translation impact on overseas warranty provisions to improve year on year by 0.4 percentage point for Hyundai Motor and 1.6 points for Kia. If the 0.4-point figure is mechanically applied to Hyundai Motor’s estimated revenue, it implies about KRW 180bn—roughly one quarter of Daishin’s KRW 750bn quarter-end contribution. The methodologies and coverage are not necessarily comparable.^{2, 8}

Still below expectations

Against consensus, the picture is weaker. Daishin Securities’ KRW 2.54tn estimate is 13.2% below the KRW 2.925tn consensus. FX is only part of the explanation: Daishin also cites weak volume from strike disruptions and higher raw-material costs, while Hana Securities adds a roughly 5% quarter-on-quarter decline in the average exchange rate, higher material costs and lower utilization.^{1, 9} The year-on-year operating-profit estimates range from +0.1% to −12% (Table 4).

TABLE 4

Hyundai Motor Q3 operating-profit estimates vary widely by broker

KRW tn · Q3 2025 actual: KRW 2.537tn

Broker	3Q26E	YoY	Reference expectation
Daishin	2.54	+0.1%	2.925
Hanwha Investment & Securities	2.40	−5.4%	3.0
Hana Securities	2.23	−12%	Not stated

Reference expectations are Daishin’s consensus and Hanwha’s market expectation · Hana said its estimate was below consensus but did not provide a comparison figureSource: the respective brokerages and Hyundai Motor^{1, 5, 8, 9}

Hanwha Investment & Securities cites strike-related production disruption—estimated at about 55,000 vehicles—along with higher raw-material prices and an unfavorable mix. Hana Securities is more positive on mix, arguing that a higher hybrid share supported average selling prices.^{8, 9}

Under the assumption, the average rate turns into a Q4 earnings headwind

The two FX channels would move in opposite directions. The average rate would be 6.1% lower year on year, reducing the won translation of overseas revenue. The quarter-end rate would be 1,360, almost unchanged from the Q3 close, leaving little new revaluation gain. Because the quarter-end rate rose 2.3% in Q4 last year and generated a translation loss, the year-on-year comparison would still be slightly positive. But the negative average-rate effect is larger (Snowshagal calculation; Table 5).^{1, 2}

TABLE 5

Hyundai Motor FX setup: Q3 actual vs. Q4 assumption

USD/KRW

Item	3Q26 actual	4Q26 assumption (Daishin)
Average rate	1,422 · YoY +2.7% · Positive for won-translated revenue	1,360 · YoY −6.1% · Negative for won-translated revenue
Quarter-end rate	1,358 · QoQ −11.9% · Translation gain on foreign-currency liabilities	1,360 · Similar to Q3-end · Slightly positive year on year (calculation)
YoY FX contribution	+KRW 980bn (sum of two Daishin Securities estimates)	Negative average-rate effect is larger (assumption)

See Appendix 2 for the numerical sensitivity exercise · This is not a forecastSource: Daishin Securities, Snowshagal^{1, 2}

Daishin Securities sees greater exposure for automakers with a large domestic won-cost base, and less for parts suppliers that produce and deliver locally. Offsets include normalized production, new models and lower material costs in Hana Securities’ view, and new models plus expanded U.S. local production that reduces tariff burden in Hanwha’s.^{1, 8, 9}

3 · ELECTRONICS

Same FX move, different earnings outlooks

Yuanta Securities raised its Q3 operating-profit estimate for Samsung Electro-Mechanics from KRW 602bn to KRW 683bn, while cutting LG Innotek from KRW 320bn to KRW 79bn.³

LG Innotek’s revenue forecast fell by only about KRW 100bn, but its operating-profit forecast was cut by KRW 241bn. Samsung Electro-Mechanics’ revenue estimate was unchanged while its profit estimate rose (Table 6).^{2, 3} Yuanta attributes the divergence to pricing, product mix and the timing lag in raw-material costs.³ The two companies differ in products, customers, launch schedules and cost structures, so this is not a clean test of FX resilience alone.

TABLE 6

Yuanta Securities: revisions to Q3 estimates

KRW bn · Changes rounded from the original figures

Item	Before	After	Change
Samsung Electro-Mechanics Revenue	3,762	3,762	0
Operating profit	602	683	+81
LG Innotek Revenue	6,359	6,259	−100
Optics revenue	5,311	5,196	−115
Operating profit	320	79	−241

Source: Yuanta Securities estimate-revision tables for Samsung Electro-Mechanics and LG Innotek³

FIGURE 4

Yuanta sees LG Innotek far below consensus and Samsung Electro-Mechanics above it

Gap between Yuanta Q3 operating-profit estimates and one-month consensus (%) · LG Electronics is the only preliminary result

This is the gap between Yuanta’s forecast and market consensus—not the amount by which FX changed earningsSource: Yuanta Securities sector Table 3 · Snowshagal calculations · Graphic: Snowshagal^{2, 3}

Samsung Electro-Mechanics: pricing and mix

Yuanta expects component ASPs to rise about 10% quarter on quarter on a richer high-value product mix. The component business is negotiating price increases with direct customers after raising channel prices, while package substrates (FC-BGA) are already seeing higher pricing. Yuanta expects a broader pricing cycle in 2027 and also points to active hedging and conservative FX guidance as reasons for the limited currency impact.³

LG Innotek: the raw-material timing lag

Yuanta says Q3 absorbed two timing effects at once: inventory built when USD/KRW was high in the first half, and the lag between raw-material purchases and shipments for a major customer’s new model. It expects cost pressure to ease from Q4 as materials bought after the won strengthened begin flowing through.³

LG Electronics: below expectations, but profit still grew

LG Electronics is the only company in this group to have released preliminary results. Q3 operating profit of KRW 781.8bn was 25.4% below Yuanta’s one-month consensus of KRW 1.0479tn, but still 13.5% higher year on year.^{2, 3, 6} Yuanta attributes the revenue shortfall to FX and deferred Vehicle Solution (VS) revenue, and the profit miss to AI data-center and robotics investment plus some voluntary-retirement costs.³

Three questions that determine FX exposure

Do you earn in dollars but spend in won? Automakers have greater exposure, while locally producing parts suppliers have less, according to Daishin.¹ Is inventory purchased at a weak-won rate still on hand? If so, margins can fall after the won strengthens.³ Can the company raise prices or shift its mix? Yuanta sees more room in MLCCs and substrates, and less in camera modules.³

4 · WHAT TO WATCH IN EARNINGS

Read the earnings release with the FX effect separated

An earnings miss means something different if the underlying business is holding up once the currency effect is separated out. The key misreading also differs by company (Table 7).

TABLE 7

What not to misread—and what to check—by company

Company	Potential misread	What to check
Hyundai Motor	Mistaking a favorable quarter-end FX swing for a recovery in the core business	Volume, mix and costs, plus any current-period warranty/translation effect disclosed by the company · Do not subtract the estimated +KRW 750bn YoY contribution directly from this year’s profit or carry it forward into the next quarter¹
LG Innotek	Mistaking this quarter’s cost-timing drag for a structural loss of competitiveness	Whether profitability recovers in Q4 as lower-FX raw materials flow into cost of goods sold³
Samsung Electro-Mechanics	Reading an above-consensus result as proof that FX does not matter	Whether the richer high-value mix and actual price increases continue³

TABLE 8

What is known, estimated and still unknown

Item	Details
KNOWN Observed figures	Q3 average USD/KRW 1,422; quarter-end 1,358 (Daishin Securities)¹ LG Electronics Q3 preliminary operating profit: KRW 781.8bn (company release)⁶ Early-October USD/KRW around 1,340 · 1,338 on Oct. 6 (cited by Hanwha Investment & Securities)^{4, 8}
ESTIMATE Estimate-based figures	Q3 YoY earnings drivers for Hyundai Motor and Kia (Daishin Securities estimates)¹ Q4 average-rate assumption of 1,360 (Daishin) · Earnings impact of lowering the applied rate from 1,450 to 1,350 (Hanwha)^{1, 8} Q3 results for six electronics names excluding LG Electronics (Yuanta estimates)³
UNKNOWN Still unknown	Hyundai Motor’s actual current-period Q3 translation effect Actual Q4 average and quarter-end USD/KRW rates, and each company’s hedge ratio When announced price increases actually show up in realized pricing

Q4 FX assumptions

The actual rate in early October was around 1,340, below Daishin Securities’ Q4 assumption of 1,360.^{1, 4, 8} Hanwha Investment & Securities says lowering the Q4 applied exchange rate from 1,450 to around 1,350 would reduce Hyundai Motor and Kia operating profit by KRW 450–620bn. The report does not specify whether that range is combined or per company.⁸

Hanwha’s FX report puts October USD/KRW in a 1,320–1,400 range. It argues that further won appreciation may be limited as National Pension Service hedging stops and the conversion effect from the SK hynix ADR fades. If the won weakens again, the Q4 earnings headwind would ease accordingly—our interpretation.¹⁰

TABLE 9

Key dates through year-end

Korea time

Date	Event	What to watch
Wed. Oct. 14	U.S. September CPI	21:30 release · Dollar direction¹¹
Thu. Oct. 22	Bank of Korea Monetary Policy Meeting	Korean rates / won sensitivity¹²
Late October	Q3 earnings releases	Hyundai Motor · Kia · LG Innotek · Samsung Electro-Mechanics · Check company filings for exact dates
Thu. Oct. 29	FOMC decision	03:00 statement (U.S. Oct. 28)¹³
End-December	Q4 quarter-end USD/KRW	Reference rate for remeasuring foreign-currency liabilities

Counterpoint · A stronger won is not bad for everyone

Banks are expected to record FX translation gains in Q3. Hana Securities estimates KRW 550bn across IBK, Hana and Woori, but classifies the gain as non-recurring.¹⁴ The timing differs too. In Yuanta’s view, LG Innotek absorbed the FX-related cost burden in Q3 first, and that burden should ease in Q4.³

A cut to earnings estimates is not automatically negative for the share price. This note examines the earnings transmission mechanism, not how much of it is already priced in.

APPENDIX · CALCULATION NOTES

How the numbers were reconciled

APPENDIX 1

Reconciling the factor bridge with the change in operating profit

Hyundai Motor Q3 · Based on Daishin Securities Table 10 · Snowshagal calculation

Comparison	3Q25	3Q26E	Change	Gap vs. factor sum
Automotive division operating profit	KRW 1.711tn	KRW 1.7523tn	+KRW 41.3bn	Approx. KRW 109bn
Consolidated operating profit	KRW 2.537tn	KRW 2.5397tn	+KRW 2.7bn	Approx. KRW 147bn

The five factors sum to +KRW 150bn · The original report does not state whether the bridge is consolidated or divisional; because it appears immediately after the automotive-division forecast on p.36, we treat it as divisional (although the p.5 summary places it beside consolidated results) · The remaining gap is not explained in the source and is left unreconciled · Factor amounts are rounded, so the residual is approximateSource: Daishin Securities · Snowshagal calculations^{1, 2}

APPENDIX 2

Hyundai Motor Q4 FX sensitivity exercise

Q4 year-on-year FX contribution · Simple mechanical application · Snowshagal calculation

Item	Method	Result
Average rate −6.1%	Divide Daishin’s annual sensitivity (10% YoY move → KRW 2.5tn) by four	Approx. −KRW 380bn
Average rate −6.1%	Apply the ratio implied by the Q3 estimate (+2.7% → +KRW 230bn)	Approx. −KRW 525bn
Quarter-end	Q4 2025 +2.3% vs. Q4 2026 assumption +0.1% · Based on roughly KRW 4.9tn of dollar liabilities inferred from the Q3 estimate	Approx. +KRW 105bn
Combined	Add the quarter-end effect to each of the two average-rate methods	Approx. −KRW 275bn to −KRW 420bn

This exercise is intended to show the direction and rough magnitude of the FX contribution; it is not a forecast or expected range · The two methods rely on the same broker assumptions and are not independent upper/lower bounds · Assumptions: quarterly sales and cost structure are constant (annual sensitivity ÷ 4), and the size/currency mix of dollar liabilities is similar across years · Tariffs, volume and new-model effects are excluded · Both the Q3 +KRW 980bn and these Q4 figures are year-on-year contributions, not the decline in operating profit from Q3 to Q4 · If USD/KRW stays around the early-October 1,340 level, the negative average-rate effect becomes larger while the positive quarter-end comparison improves by roughly KRW 70bnSource: Daishin Securities · Snowshagal calculations^{1, 2}

GLOSSARY

Average rate: The average exchange rate over a quarter · Used as an approximation for translating foreign-currency transactions such as revenue and costs into won
Quarter-end rate: The exchange rate on the final day of the quarter · Used to remeasure foreign-currency monetary assets and liabilities at period end
Warranty provision: A liability accrued in advance for future warranty repairs on vehicles already sold · Overseas obligations are often denominated in foreign currency, mainly dollars, so their won value falls when USD/KRW declines
Current-period effect vs. YoY contribution: Current-period effect is the amount generated in this quarter; year-on-year contribution is the change versus the same quarter last year · The KRW 750bn discussed in this note is the latter
FX translation gain/loss: Accounting gain or loss created when foreign-currency items are remeasured · Depending on the item and accounting treatment, it may appear in operating profit, non-operating profit/loss, or other comprehensive income
Consensus: Average of brokerage forecasts · The figure varies somewhat by data provider and lookback period
Preliminary results: Results released by a company before the full accounts are finalized · Final figures may differ
ADR: A depositary receipt listed in an overseas market · Converting issuance proceeds into won can create demand for the currency

MATERIALS REVIEWED

Companies mentioned

Hyundai Motor 005380
Kia 000270
Samsung Electro-Mechanics 009150
LG Innotek 011070
LG Electronics 066570

Brokerage reports

Daishin Securities Auto/Secondary Battery October Monthly 10.07
Hana Securities Automakers 3Q26 Preview 10.07
Hanwha Investment & Securities Autos 3Q26 10.08
Yuanta Securities Electronics 3Q26 Preview 10.08
Hana Securities Semiconductor Weekly 10.06
Hana Securities Banks Preview 10.06
Hanwha Investment & Securities FX Monthly 10.08

SOURCES & METHODOLOGY (14)

Information cutoff As of after the Korea market close on Oct. 8, 2026 · All Q3 earnings figures are brokerage estimates except LG Electronics preliminary results · Published Oct. 9, 2026
Reference dates Varies by item · Date and page/table references are listed at the end of each source entry (page numbers refer to the PDF)
Estimates Hyundai Motor/Kia earnings bridges and the Q4 1,360 assumption are from Daishin Securities; the impact of lowering the applied rate from 1,450 to 1,350 is from Hanwha Investment & Securities; Q3 earnings and estimate revisions for six electronics companies are Yuanta Securities estimates/assumptions · Hanwha’s 1,350 appears in the same report’s tariff-estimate table (Table 10) alongside its discussion of adjusting the Q4 applied rate; this note does not treat 1,350 as Hanwha’s definitive Q4 base-case FX forecast
Official results Hyundai Motor Q3 2025 operating profit and LG Electronics Q3 2026 preliminary operating profit were separately verified against company releases
Calculations in this note The $100 example, summed FX contribution, gap between the factor bridge and operating-profit change (Appendix 1), quarter-end percentage changes, conversion of Hanwha’s percentage-point effect into won, estimate-revision amounts, LG Electronics consensus gap, and the Q4 sensitivity exercise (Appendix 2) are Snowshagal calculations · Formulas are shown below under “Calculations in this note”
Source differences Q3 quarter-end USD/KRW: 1,358.4 in Daishin, 1,352.8 in Hanwha · Hyundai Motor Q3 consensus: KRW 2.925tn in Daishin, KRW 3.0tn in Hanwha · LG Electronics consensus uses Yuanta’s sector table (KRW 1.0479tn); using Yuanta’s company-page figure of KRW 1.03tn would imply a −24.1% gap
Market quotes Early-October USD/KRW uses Hanwha’s cited Oct. 6 level of 1,338 and Investing.com quotes including offshore trading
Accessing original reports Public PDF URLs for the brokerage reports could not be verified, so sources are identified by title, date and page number · Naver Pay Securities Research Search by title on services such as Naver Pay Securities Research

1. Daishin Securities, Kim Gui-yeon (Autos/Secondary Batteries) and Park Seo-young (RA), “Auto/Secondary Battery October 2026 Monthly & 3Q26 Preview · Back to the Core Business,” Oct. 7, 2026 · PDF p.1 (previous FX assumption 1,520), p.3 (local production/local delivery structure for suppliers), p.5 summary table, p.36 Hyundai Motor page (YoY profit-driver bridge shown immediately after the automotive-division forecast), p.42 Kia page, p.28 [FX] (USD/KRW below 1,400 after Aug. 21), p.38 Table 10 Hyundai Motor estimates (consolidated operating profit KRW 2,537.0bn in 3Q25 → KRW 2,539.7bn in 3Q26E; automotive division KRW 1,711.0bn → KRW 1,752.3bn), p.39 Table 11 (quarterly average and quarter-end FX rates) · 3Q26 average USD/KRW 1,422 (YoY +2.7%; previous assumption 1,520) · Quarter-end 1,358 (YoY −3.1%, QoQ −11.9%) · 4Q26 assumption 1,360 (YoY −6%, QoQ −4%), described as the first YoY decline in the average rate in 12 quarters since 4Q23 · Hyundai Motor 3Q26E operating profit KRW 2.54tn, 13.2% below KRW 2.925tn consensus · YoY drivers: average rate +KRW 230bn, quarter-end rate +KRW 750bn, volume & mix −KRW 1.0tn, costs −KRW 400bn, tariffs +KRW 570bn · Kia 3Q26E operating profit KRW 2.392tn, 6.1% below KRW 2.547tn consensus; average rate +KRW 230bn, quarter-end rate +KRW 680bn, volume & incentives −KRW 44bn, costs −KRW 350bn, tariffs +KRW 300bn · A 10% YoY move in average USD/KRW changes annual operating profit by KRW 2.5tn for each of Hyundai Motor and Kia · Estimated dollar-denominated portion of each company’s foreign-currency warranty provisions: about KRW 5–6tn · Automakers are more exposed than locally producing suppliers because a larger share of their costs is in won.

2. Calculations in this note · $100 example: 100 × 1,385 = KRW 138,500; 100 × 1,422 = KRW 142,200 (+2.7%); 100 × 1,520 = KRW 152,000 (KRW 142,200 is 6.4% lower) · FX rates are rounded from Daishin Securities actuals/assumptions · Hyundai Motor Q3 FX contribution = average rate +KRW 230bn + quarter-end rate +KRW 750bn = +KRW 980bn; Kia = +KRW 230bn + KRW 680bn = +KRW 910bn · LG Innotek operating-profit forecast cut = 320 − 79 = KRW 241bn · Hyundai Motor five-factor sum = 230 + 750 + 570 − 1,000 − 400 = +KRW 150bn vs. Daishin Table 10 automotive-division operating-profit change of KRW 1,752.3bn − KRW 1,711.0bn = +KRW 41.3bn, leaving a gap of roughly KRW 109bn; consolidated change KRW 2,539.7bn − KRW 2,537.0bn = +KRW 2.7bn, leaving a gap of roughly KRW 147bn (factor amounts are rounded) · Quarter-end QoQ changes: 3Q25 1,402.2 ÷ 1,356.4 − 1 ≈ +3.4%; 3Q26 1,358.4 ÷ 1,541.5 − 1 ≈ −11.9%; 4Q25 1,433.9 ÷ 1,402.2 − 1 ≈ +2.3%; 4Q26 assumption 1,360 ÷ 1,358.4 − 1 ≈ +0.1% · Hanwha 0.4ppt valuation-loss impact × estimated Q3 revenue KRW 44.6tn ≈ KRW 180bn · LG Electronics 781.8 ÷ 1,047.9 − 1 ≈ −25.4% using Yuanta sector Table 3 · If the Q4 average is 1,340, YoY change = 1,340 ÷ 1,448.0 − 1 ≈ −7.5% · Hyundai Motor Q4 YoY FX sensitivity: average-rate method 1 = KRW 2.5tn annual sensitivity / 10% ÷ 4 × 6.1 ≈ −KRW 380bn; method 2 = KRW 230bn ÷ 2.67% × 6.1% ≈ −KRW 525bn · Quarter-end effect = Q3 +KRW 750bn ÷ (3.4% + 11.9%) ≈ KRW 4.9tn inferred dollar liabilities × (2.3% − 0.1%) ≈ +KRW 105bn · Combined ≈ −KRW 275bn or −KRW 420bn depending on the average-rate method · If quarter-end is 1,340, the positive quarter-end comparison increases by about KRW 70bn · These are simple proportional calculations based on the same brokerage assumptions, not forecasts or an expected range · Yuanta Table 3 gaps: LG Innotek −70.3%, Daeduck Electronics −2.1%, TLB −0.6%, ISU Petasys −0.2%, Haesung DS +7.0%, Samsung Electro-Mechanics +9.9%.

3. Yuanta Securities, Go Sun-young (Electronics), “Same But Differ (7) · 3Q26 Preview: Pricing Power Sets the Direction,” Oct. 8, 2026 · PDF p.11 sector summary; p.12 Table 3 (vs. one-month consensus); p.18 LG Innotek comments; p.19 Table 1 estimate revisions (3Q26E operating profit KRW 320bn → KRW 79bn, revenue KRW 6,359bn → KRW 6,259bn, optics revenue KRW 5,311bn → KRW 5,196bn); p.24 LG Electronics preliminary review (operating profit YoY +13.5%); p.30 Samsung Electro-Mechanics comments (component ASP potentially +10% QoQ on high-value mix, package-substrate price increases, direct-customer price negotiations, broader 2027 pricing cycle); p.31 Table 1 revisions (Samsung Electro-Mechanics 3Q26E operating profit KRW 602bn → KRW 683bn, revenue unchanged at KRW 3,762bn) · Yuanta’s framing: “What FX separated was not earnings, but pricing power” · Five of seven covered names at/above operating-profit consensus; misses: LG Innotek and LG Electronics · Sector Table 3, Q3 operating profit vs. one-month consensus (KRW bn): LG Innotek 78.7 vs. 265.4; LG Electronics prelim. 781.8 vs. 1,047.9; Samsung Electro-Mechanics 683.2 vs. 621.4; Haesung DS 36.5 vs. 34.1; Daeduck Electronics 74.9 vs. 76.5; ISU Petasys 96.3 vs. 96.5; TLB 16.2 vs. 16.3 · MLCCs and substrates offset FX via pricing/mix; camera modules absorb FX pressure through the timing lag between material purchases and shipment · Samsung Electro-Mechanics component ASP about +10% QoQ, active hedging and conservative FX guidance, direct-customer price talks · LG Innotek burden from high-FX first-half inventory and the material-purchase/new-model-shipment lag; cost pressure expected to ease from Q4 · LG Electronics 3Q26 preliminary operating profit KRW 781.8bn, 24.1% below the company-page consensus of KRW 1.03tn; revenue affected by FX and deferred VS revenue, profit by AI data-center/robotics investment and some voluntary-retirement expense · ISU Petasys price increases expected to show more fully from Q4 · Yuanta’s sector table and company pages use different consensus figures.

4. Investing.com · USD/KRW historical data · Oct. 6: 1,338.33 · Oct. 7: 1,339.95 · Oct. 8: 1,341.64 (includes offshore quotes; may differ from the domestic close)

5. Hyundai Motor · Hyundai Motor Announces Q3 2025 Business Results · Oct. 30, 2025 · Revenue KRW 46.7214tn · Operating profit KRW 2.5373tn (YoY −29.2%)

6. LG · LG Electronics Q3 2026 Preliminary Earnings Release · Oct. 7, 2026 · Operating profit KRW 781.8bn (YoY +13.5%) · Preliminary, consolidated K-IFRS basis

7. Hana Securities, Kim Rok-ho (Semiconductors), “Semiconductor & Materials/Components Weekly · Focus on the Industry Cycle, Not Whether Earnings Beat,” Oct. 6, 2026 · PDF pp.1 and 25 · September semiconductor exports USD 60.3bn, a record · Samsung Electronics estimate cut after an FX-assumption change; SK hynix downgrade also seen as unavoidable · “The estimate cut is entirely FX-driven, not a change in fundamentals” · SK hynix 3Q26F USD/KRW assumption: 1,500.

8. Hanwha Investment & Securities, Kim Sung-rae (Autos), “Autos · 3Q26: Lower Expectations, Shifting Focus,” Oct. 8, 2026 · PDF p.1 summary (higher raw materials, negative mix); p.2 strike disruption; p.7 tariffs (25% in 3Q25 → 15%) and FX translation of overseas warranty provisions; p.8 Table 10 U.S. tariff-impact estimates (applied FX 1,417 in 3Q26E, 1,350 in 4Q26E); p.9 discussion of Q4 applied-rate adjustment · Hyundai Motor 3Q26E operating profit KRW 2.40tn (YoY −5.4%), Kia KRW 2.39tn · Market expectations KRW 3.0tn and KRW 2.55tn · Estimated 55,000-unit production disruption from 120 strike hours in July–August · YoY improvement in FX-translation valuation-loss impact on overseas warranty provisions: Hyundai Motor 0.4ppt, Kia 1.6ppt (Q2-end 1,541.5 → Q3-end 1,352.8) · “USD/KRW was 1,338 as of Oct. 6” · Lowering the exchange rate applied to existing Q4 revenue and operating-profit estimates from 1,450 to around 1,350 implies a KRW 450–620bn operating-profit reduction; the report does not specify company allocation · Tariff burden eases with new models and expanded U.S. local production.

9. Hana Securities, Song Sun-jae (Autos), “Automakers 3Q26 Preview: The Miss Was Expected, and the Stock Already Reflects It,” Oct. 7, 2026 · PDF p.1 · Negative factors: domestic production disruption, higher material costs and lower utilization; mix supported ASP through a higher HEV/EV share · Hyundai Motor 3Q26F operating profit KRW 2.23tn; Kia KRW 2.29tn · A KRW 190 decline in the quarter-end exchange rate (−12% QoQ) partly offsets pressure through warranty-cost reversals, but higher materials, a 5% QoQ drop in the average rate and lower Hyundai Motor utilization are larger negatives · Lower average FX is a Q4 earnings burden · Recovery factors: normalized production, new models and lower material costs · Hyundai Motor 3Q26F operating profit −12% YoY.

10. Hanwha Investment & Securities, Choi Gyu-ho (Economics), “Hanwha FX Monthly · Strong U.S., Weak East Asia,” Oct. 8, 2026 · PDF p.3 summary, pp.8–9 on the won, pp.15–16 Table 2 and outlook · USD/KRW 1,357.6 on Sept. 30 · October range 1,320–1,400 · Won support from flows weakens as the SK hynix ADR conversion effect fades and National Pension Service hedging stops; external risk could push the rate toward the upper end near 1,400 · Semiconductor-export dollar selling and official caution should limit overshooting.

11. U.S. Bureau of Labor Statistics · Schedule of Selected Releases, October 2026 · September Employment Situation: Oct. 2, 08:30 ET · September CPI: Oct. 14, 08:30 ET · 21:30 Korea time

12. Bank of Korea · Monetary Policy Meeting Schedule · Next meeting: Thursday, Oct. 22

13. Federal Reserve Board · October 2026 Calendar · FOMC Oct. 27–28 · Statement at 14:00 ET and press conference at 14:30 ET on Oct. 28 · Korea time: Oct. 29 at 03:00 and 03:30

14. Hana Securities, Choi Jung-wook (Banks), “Bank Industry Preview · Q3 Results Hold Up, Largely on Non-Recurring Factors,” Oct. 6, 2026 · PDF p.1 · Estimated KRW 550bn of FX translation gains at IBK, Hana and Woori as USD/KRW fell · End-September USD/KRW about KRW 190 lower than end-June; estimated CET1 benefit at the four major financial groups of roughly 1.5bp per KRW 10 move, or about +30bp theoretically.