[Featured Stock] Sinsong Holdings Halts Sowing in Ukraine... Food Crisis Becomes Reality

[Asia Economy Reporter Hyungsoo Park] Shinsong Holdings' stock price is soaring. As Ukrainian farmers have stopped sowing wheat and the Ukrainian government has halted exports of major foodstuffs, the global food crisis is entering a countdown phase. Expectations for overseas grain trading business appear to have influenced the stock price.

At 2:03 PM on the 7th, Shinsong Holdings was trading at 6,920 KRW, up 29.83% from the previous trading day.

In central Ukrainian farms, it is the season to sow wheat, barley, and corn, but due to Russia's invasion, sowing is impossible. The Black Sea ports are virtually at a standstill. Russia and Ukraine account for about one-third of the world's wheat exports. If the war prolongs and sowing cannot be done in Ukraine, a global food crisis is highly likely.

The United Nations Food and Agriculture Organization (FAO) reported that the global food price index in February reached 140.7, soaring 20.7% compared to the previous year. This is also the highest since statistics began in 1996. Wheat prices on the Chicago Mercantile Exchange have surged more than 50% since Russia invaded Ukraine on the 24th of last month.

Shinsong Holdings purchases grains from overseas producers and sells and distributes them to importers worldwide. Since it requires expertise in understanding grain supply and demand in importing countries, accurate market analysis, and logistics operations, the entry barrier is high. Overseas suppliers are either large companies with oligopoly positions in their countries or government-owned enterprises abroad. From a supply and demand perspective, stable grain supply can be secured, and based on this, the company conducts trading business selling grains domestically.

Shinsong Holdings recorded sales of 186.4 billion KRW, operating profit of 7 billion KRW, and net profit of 7.2 billion KRW last year. Although sales decreased by 9.4%, operating profit and net profit increased by 34.9% and 159.3%, respectively. The company explained that profits increased due to normalization of overseas business division earnings and an increase in equity method valuation gains of investment assets.

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