[Click eStock] Samyang Foods, Why It Smiles Despite Cost Increase Burden

On the 15th, ramen was displayed at a large supermarket in downtown Seoul. With rising recognition through Korean dramas and movies, ramen is gaining global popularity. According to the industry, Nongshim's cumulative overseas sales of Shin Ramyun in the third quarter have surpassed domestic sales. Samyang Foods' overseas sales accounted for 57% of total sales last year. Photo by Moon Honam munonam@

[Asia Economy Reporter Junho Hwang] Daishin Securities recently maintained Samyang Foods' stock price at 120,000 KRW despite the burden of rising international grain prices due to geopolitical uncertainties. Although cost pressures have clearly increased, they expected significant foreign exchange benefits from strong export performance.

Daishin Securities forecasted that the consolidated sales for the first quarter of this year would reach 180.9 billion KRW, a 29% increase year-on-year, and operating profit would grow by 43% to 20.6 billion KRW. This surpasses the previous Daishin Securities estimate of 17.9 billion KRW and the consensus operating profit of 17.5 billion KRW.

The main reason cited was the strong export trend to China, the Americas, and Indonesia. The sales subsidiaries established last year in China and the United States began full-scale operations from the beginning of the year, leading to improved performance.

Yujeong Han, a researcher at Daishin Securities, stated, "We conservatively reflected the impact of rising prices of key raw materials such as wheat and palm oil by lowering domestic operating profit estimates for the second half of this year and the first half of next year. However, the weak Korean won trend is expected to have a positive foreign exchange effect in overseas business divisions where dollar settlements account for a significant portion. We estimate that the burden of rising costs will be offset by strong exports and foreign exchange effects."

Daishin Securities projected that export sales in dollar terms would grow by 42% year-on-year, and export sales in Korean won terms would increase by 50%.

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