[Click eStock] "Samyang Foods Raises Q3 Earnings Estimates"

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On the 21st, IBK Investment & Securities upgraded its third-quarter earnings forecast for Samyang Foods. The investment opinion 'Buy' and the target price of 720,000 KRW were maintained.

Kim Taehyun, a researcher at IBK Investment & Securities, stated, "The consolidated sales for the third quarter are expected to increase by 33.4% year-on-year to 447.3 billion KRW, and operating profit is projected to rise by 87.5% to 81.4 billion KRW," adding, "Compared to the previous estimates (416.9 billion KRW / 80.5 billion KRW), sales have been revised upward by 7% and operating profit by 1%."

Researcher Kim explained, "The reason for the smaller upward revision in operating profit relative to sales is due to additional expenses such as labor costs for increasing production volume under limited capacity conditions," and added, "Despite increases in selling and administrative expenses such as export duties and transportation costs, a significant profit improvement is expected due to the leverage effect from export growth and cost reductions."

Kim forecasted that export growth to the United States would be particularly prominent. He anticipated that exports to the US and European regions would be the focus, with relatively lower export growth to China and Southeast Asia.

He assessed, "As the proportion of sales in the US increases, it is positive for overall margin improvement," and predicted, "Exports to China are expected to show double-digit growth again in the fourth quarter, reflecting the volume from the Guanggun Festival (November 11)."

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