Published 15 Apr.2022 10:21(KST)
[Asia Economy Reporter Park Hyungsoo] Shinsong Holdings' stock price is soaring. News that Argentina, the world's largest exporter of soybean meal and soybean oil and one of the major suppliers of wheat, soybeans, and corn, is experiencing disruptions in grain exports appears to have influenced the stock price. Related stocks such as Hanil Feed and Hyundai Feed, which are linked to the surge in grain prices, are showing strength, leading to widespread buying.
At 10:19 a.m. on the 15th, Shinsong Holdings was trading at 8,980 KRW, up 18.13% from the previous day.
Due to the rise in diesel prices caused by the Ukraine war, Argentine grain transporters have been striking for four consecutive days, demanding higher freight charges. Major foreign media reported that Argentina's agricultural exports have been paralyzed.
Argentina is currently in the peak grain harvesting season, so the losses caused by the strike are known to be significant. Argentina's grain production value reached 35 billion USD (43.08 trillion KRW) in 2021.
Gustavo Idigoras, chairman of Ciara-CEG, an oil and grain export company, said, "The strike is causing losses of about 100 million USD (1.23 trillion KRW) per day," adding, "Approximately 200 tons of agricultural products are not being unloaded at port terminals."
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. 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 segment earnings and an increase in equity method valuation gains on investment assets.
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