[Click eStock] "Samyang Foods, Overseas Sales Expansion Expected... Target Price Up"

[Asia Economy Reporter Lee Jung-yoon] Daishin Securities raised its target price for Samyang Foods by 9% to 120,000 KRW on the 24th, maintaining a buy rating while upgrading its profit estimates due to a sharp increase in ramen exports this year.

Han Yoo-jung, a researcher at Daishin Securities, explained, "We expect performance momentum through overseas sales expansion, and the resolution of the overhang risk that has long suppressed the stock price is also positive," adding, "We maintain it as the top pick in the food and beverage sector."

Samyang Foods is expected to continue strong ramen export growth this year following last year. Researcher Han said, "Due to the base effect from the sharp increase in ramen exports at the beginning of the COVID-19 outbreak in 2020, the export ramen sales growth rate in 2021 was in the single digits, but it grew more than 40% compared to 2019 before the pandemic," and added, "We approached the domestic ramen sales estimate conservatively and lowered the domestic regional performance estimate. Domestic sales in 2022 are expected to be 263.4 billion KRW, with the price increase effect being more significant than volume growth."

Samyang Foods established sales corporations in China and the United States in the second half of last year and began full-scale operations. Market expansion is expected through the corporatization of sales channels. Additionally, the new factory in Miryang, Gyeongnam Province, is expected to start full production from the second quarter of this year. As a result, the operation of the existing factories, which had exceeded optimal capacity, is also expected to stabilize. Furthermore, the transportation distance from Wonju, Gangwon Province, to Busan Port, which was 340 km, will be reduced to 70 km from Miryang to Busan Port, which is analyzed to enable logistics cost savings.

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