Industrial Classification and Feature (4) – Consumer discretionary industry

Automotive and Auto Parts Industry

The automotive and auto parts industry is a pyramid-shaped large-scale production system. In the automobile industry, the development cost of new cars and the size of investment capital for related facilities are so large that the economies of scale are in effect, and the industry can see direct and indirect job creation effects and front-to-back chain effects.

The automobile and auto parts industry is a typical consumer discretionary industry, and economic and consumer sentiment affects the number of cars sold. In addition, the industry can benefit from the won depreciation, which can secure price competitiveness and profitability in the wake of the won’s depreciation, and improve costs even when cold-rolled steel prices fall.

Representative stocks in the automotive industry(KOSPI/KOSDAQ)

  • 1st tier parts manufacturer: 현대모비스, 성우하이텍, S&T모티브, 한국타이어, 금호타이어
  • 2nd tier parts manufacturer: 인지컨트롤스, 새론오토모티브, 에스엘, 동양기전, 동원금속, 평화산업, 덕양산업, 화승알앤에이
  • Car maker: 현대자동차, 기아자동차, 쌍용자동차

Education Industry

The education industry has a defensive economy. In particular, the education industry is characterized by volatility due to the education policy of the government.

The education industry is divided into subdivided markets, so it is important to understand the market trends.

For example, in the case of workbooks, the ability to respond to changes is important because of the intense competition. In the case of after-school schools, the ability to develop contents for each company is important.

In the case of online education, there is not much difference in the market share among the companies. As a result, several companies are entering the competitive market. In case of the English institute, the growth rate of the premium English institute targeting the upper students is noticeable due to the polarization of education expenses.

The education industry has inelastic characteristics in the economy due to the high education heat in Korea. As the market becomes polarized, the market is becoming a premium. The impact of government policy changes is significant. In addition, the education industry is segmented by target age and content type, and is often diversified by business type, merger and acquisition, etc.

Representative stocks in the education industry(KOSPI/KOSDAQ)

  • After school: 대교, 웅진씽크빅, 더블유에프엠 etc.
  • Online training: 메가스터디, 비상교육 etc.
  • Etc: 청담러닝, 정상제이엘에스, 삼성SDS etc.

Distribution industry

The distribution industry is an industry that provides services that connect producers and consumers of products. Wholesalers and retailers can be divided into wholesalers to distribute goods to distributed retailers rather than end consumers, and retailers to sell products to end consumers.

Retailers are characterized by sensitivity to wages, interest rates, and inflation. In the case of department stores, it is mature. However, as oligopoly continues, earnings at top department stores remain steady.

Discount stores are more likely to grow than department stores. However, the competition in the industry is continuing and intensifying, and the performance of each company is differentiated according to its competitiveness.

Representative stocks in the distribution industry(KOSPI/KOSDAQ)

  • Department store: 신세계, 롯데쇼핑, 현대백화점
  • Discount store: 이마트, 롯데하이마트
  • Online shopping mall: 인터파크, 예스24, 현대홈쇼핑, GS홈쇼핑
  • Convenience: 롯데쇼핑(세븐일레븐), 이마트(위드미), GS리테일(GS25), BGF리테일(CU편의점), 유성티엔에스(고속도로 휴게소), 서희건설(로그인 편의점)

Media Industry

The media industry is an industry that provides information and entertainment services through broadcasting. Platform operators and program operators are classified as platform operators, while terrestrial broadcasters (SO) and IPTV operators are engaged in business such as terrestrial broadcasters and PP (cable TV). The main revenue source for media companies is advertising and subscription fees.

As the media industry continues to grow, and the terrestrial advertising system will improve, the growth potential of the media industry may change. The growth of the license fee market is expected to be driven by the expansion of digital services.

Major stocks in the media industry(KOSPI/KOSDAQ)

  • Terrestrial broadcasting: KBS, MBC, SBS
  • Creative agency: 제일기획, 지투알
  • SO: CJ헬로, LG유플러스, 스카이라이프, 현대HCN, IHQ

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