[Click eStock] "Samyang Packaging to Accelerate Performance Improvement Starting Next Year"

[Asia Economy Reporter Eunmo Koo] Korea Investment & Securities forecasted that Samyang Packaging's performance improvement will accelerate starting next year. The investment opinion and target price were maintained at 'Buy' and 24,000 KRW, respectively.

Korea Investment & Securities estimated that Samyang Packaging's operating profit for the third quarter of this year will reach 19.6 billion KRW, an 18% increase compared to the same period last year. This is a solid performance 5% higher than the previous forecast, and the quarterly results have shown a continuous improvement trend compared to the previous year since the third quarter of 2018. Researcher Do-yeon Lee of Korea Investment & Securities stated in a report on the 26th, "Despite COVID-19, strong demand for high value-added aseptic beverage packaging has continued," adding, "Currently, due to tight supply and demand, the maximum operating rate across all aseptic facilities is expected to be maintained throughout the third quarter."

The PET bottles, which contribute the second highest to sales, are expected to recover from the slump in the second quarter and show a slight increase in sales volume compared to the previous quarter in the third quarter. Researcher Lee said, "Despite the impact of COVID-19, domestic demand remained steady without disruption, but the decline in export-oriented (indirect export) PET bottle demand was the cause of the sales decrease in the second quarter," and added, "However, by redirecting these export volumes to solid domestic demand, PET bottle sales are expected to rebound starting from the third quarter."

Performance improvement is expected to accelerate from next year. Researcher Lee evaluated, "The new aseptic line 4, which was expected to take 3 to 4 years to reach 100% operation, reached maximum operating rates in less than a year due to strong demand," calling it "a remarkable growth rate that overcame harsh conditions such as COVID-19." He further stated, "Accordingly, the investment in the new line 5 has been decided and will be completed in June next year," adding, "Since it will utilize existing factory sites and equipment, the investment cost will be reduced by half, and targeting high-priced beverages, it is expected to have the highest margin among aseptic facilities."

The investment opinion and target price were maintained at 'Buy' and 24,000 KRW, respectively. Researcher Lee said, "Performance improvement continues regardless of the domestic economy and COVID-19," and added, "The product mix is shifting from producing empty PET bottles to manufacturing aseptic beverages, transforming the company's profile into high value-added and high growth. Especially next year, secured growth awaits with the operation of the new line 5, so we proactively recommend buying."

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