"Each 10-Won Drop in Exchange Rate Boosts Profit by 2.5 Billion Won"...Stocks Benefiting from the Strong Won at 1,340 Won Level

Lowest Exchange Rate in Two Years... Increased Interest in Won-Strong Beneficiaries

Airline, Food, and Banking Sectors Expected to See Improved Profitability from a Stronger Won

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Recently, the rapid decline in the KRW-USD exchange rate has sparked increased interest in so-called "beneficiaries of a stronger won." In the securities market, airlines, food and beverage, and banks are cited as the main industries that benefit most from a lower exchange rate.

At the Lowest Exchange Rate in Two Years... Focus on Beneficiaries of a Strong Korean Won

According to the Seoul foreign exchange market as of September 14, the KRW-USD exchange rate, which had stood at 1,555 won on July 2, has recently plunged to the 1,340 won range—a drop of about 13%. This is the lowest level since early October 2024. Analysts attribute the ongoing decline in the exchange rate to major semiconductor companies, such as Samsung Electronics and SK hynix, converting large dollar earnings into won.

As the exchange rate falls, the securities industry is busy identifying potential beneficiaries of a stronger won. The airline sector is considered a classic example. Because airlines pay substantial portions of major expenses—such as fuel costs, aircraft lease fees, and interest on foreign currency debt—in dollars, a weakening dollar immediately translates into cost reductions and mitigated foreign debt burdens. In addition, a stronger won tends to create a virtuous cycle by significantly increasing demand for overseas travel among Korean travelers (outbound tourism).

Ryu Jehyeon, a research analyst at Mirae Asset Securities, explained, "When the won strengthens, airlines see their cost burdens ease while passenger demand improves. The decline in the KRW-USD exchange rate is an encouraging development for the aviation industry." He selected Korean Air as his top pick. "Despite concerns over high oil prices, Korean Air enjoys several tailwinds, including the benefits of a strong won, the momentum from the peak cargo season, synergies from the planned merger with Asiana Airlines, and its growing defense business value," Ryu highlighted.

Airlines, Food and Beverage, Banks Forecast to See Improved Profitability as Won Strengthens

The food and beverage industry is also regarded as a major beneficiary of a strong Korean won. Since the domestic food sector relies heavily on imports of key raw materials—such as wheat, corn, soybean, and sugar—a stronger won offers companies substantial savings on import costs. Among food and beverage companies, those with a solid domestic sales base and relatively low overseas sales exposure are expected to benefit most from a weaker dollar.

According to Kyobo Securities, as of 2025, the percentage of overseas revenue for food and beverage companies is as follows: Samyang Foods (80%), Orion (65%), CJ (51%), Nongshim (44%), Lotte Wellfood (23%), Binggrae (20%), and HiteJinro (10%).

Wooyoung Kwon, a research analyst at Kyobo Securities, identified Lotte Wellfood as his preferred pick. He estimated, "For every 10 won decrease in the KRW-USD exchange rate, Lotte Wellfood's annual operating profit improves by about 2.5 billion won," adding, "Recent double-digit growth at its Indian subsidiary, coupled with domestic business improvement, makes the stock even more attractive from a valuation perspective."

Within the financial sector, banks are expected to gain significantly from the stronger won. As the exchange rate falls, banks see a marked increase in foreign currency translation gains when valuing their non-won assets and liabilities. In addition, a reduction in risk-weighted assets (RWA) leads to a rise in Common Equity Tier 1 (CET1), a core capital adequacy indicator for banks.

Shinhan Investment & Securities is focusing on Hana Financial Group. According to Shinhan analyst Kyungwan Eun, "Due to the fall in the KRW-USD exchange rate in the third quarter, Hana Financial Group is likely to record about 150 billion won in foreign currency translation gains. With this enhanced capital base, the company is expected to execute further shareholder return initiatives—including additional share buybacks and cancellations amounting to around 300 billion won—in the fourth quarter."

This content was produced with the assistance of AI translation services.