[Click eStock] "Samyang Foods, Strong 1Q Performance Expected Due to Domestic and Overseas Growth"

[Asia Economy Reporter Oh Ju-yeon] NH Investment & Securities analyzed on the 22nd that Samyang Foods is expected to outperform initial estimates not only due to increased domestic and international food demand but also through collaboration with local overseas distributors and channel expansion. Accordingly, the investment opinion was maintained as 'Buy' and the target price was kept at 120,000 KRW.

According to NH Investment & Securities, Samyang Foods' consolidated sales for the first quarter of this year are estimated at 151.5 billion KRW, and operating profit at 21.2 billion KRW, representing increases of 25.9% and 38.4% respectively compared to the same period last year.

At the beginning of the year, there were concerns about export setbacks to China due to the novel coronavirus (COVID-19), but despite short-term logistics disruptions, sales are expected to increase due to rising food demand within China.

North American sales are also expected to increase by about 50% year-on-year, driven by OEM production in the U.S. and new local distribution entries in Canada.

Domestically, although market share growth is limited, overall food demand is rising, leading to increased sales.

Researcher Jo Mi-jin stated, "Overseas exports, which account for more than half of total sales, are expected to increase by about 20% year-on-year despite last year's low base effect," adding, "This is judged to be structural growth through the expansion of local distribution channels and increased brand awareness rather than a short-term increase in food demand caused by COVID-19."

She also analyzed, "The renewal of the contract with Youbei, which has a distribution network throughout China, is expected to continue expanding regional coverage within China," and "In the U.S., Canada, and Southeast Asia, overall K-food awareness is increasing, raising consumer interest. Based on this, increased collaboration with local distributors and stabilization of trading partners will lay the foundation for full-scale growth."

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