[Click eStock] "Samyang Foods, Expecting Differentiated Growth Within Industry... Target Price Up"

Target Price Raised from 660,000 Won to 830,000 Won

On the 14th, Kiwoom Securities forecasted that Samyang Foods will show differentiated growth within the industry and raised its target stock price from 660,000 KRW to 830,000 KRW. The investment rating was maintained as 'Buy.'

Park Sang-jun, a researcher at Kiwoom Securities, stated, "We have revised upward the operating profit forecast for Samyang Foods in the second quarter of this year to 81.2 billion KRW, an 84% increase compared to the same period last year," adding, "This is because the average selling price (ASP) and the growth of highly profitable exports have risen more sharply than expected, raising the company's overall gross profit margin." He continued, "Samyang Foods is expected to show differentiated growth within the industry as exports of its flagship brand, Buldak Bokkeum Myun, expand into the U.S. and European markets."

The strong export performance is translating into favorable results. Park explained, "The export boom in the second quarter is believed to be due to the normalization of Chinese online channels, entry into mainstream channels in the U.S. and Europe, and Asian markets," and analyzed, "In particular, the rapid increase in demand from the U.S. and Europe will help mitigate the impact of seasonal demand fluctuations in China on the company's overall performance compared to the past."

Further ASP increases are expected. Park said, "Currently, the U.S. and Europe, where exports of Buldak Bokkeum Myun are rapidly increasing, have higher price levels compared to other regions, creating an environment favorable for increased demand for low-priced foods like ramen," and predicted, "Therefore, due to the increase in sales proportion in the U.S. and Europe and the rise in bargaining power from the increase in distribution channels, additional ASP growth is possible."

Sales growth is also anticipated following the expansion of the Miryang Plant 2 next year. Park stated, "Production capacity is expected to increase by about 40% based on sales volume after the completion of Miryang Plant 2 in May next year," and added, "Considering that sales growth will focus on the U.S. and Europe where ASP is high, along with the possibility of expanding new distribution channels and establishing local sales subsidiaries, the quarterly maximum sales after the completion of Plant 2 are likely to increase beyond the production capacity growth rate."

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