[Click eStock] "Samyang Foods at the Start of Expanding Overseas Momentum... Target Price Raised"

On April 21, Shinhan Investment Corp. raised its target price for Samyang Foods from 8.6 million won to 11 million won, citing expectations of continued strong growth driven by expanding overseas momentum. The investment opinion was maintained at 'Buy'.

Shinhan Investment analyst Cho Sanghoon explained, "We raised our target price by 28% compared to the previous level, reflecting upward revisions to export performance estimates due to improvements in regional mix and a stronger dollar." He added, "Although the valuation may appear somewhat burdensome, it is important to note that we are at the beginning of a period of expanding overseas momentum, which should sustain high growth potential."

First-quarter results this year are expected to meet the heightened expectations. Analyst Cho stated, "First-quarter revenue is projected to reach 500.7 billion won, up 29.8% year-on-year, and operating profit is expected to increase by 33.1% to 106.7 billion won, in line with consensus (the average of securities firms' forecasts)." He added, "As in the previous year, the combination of increased export sales volume, improved regional mix, and lower input costs is expected to meet elevated market expectations."

Exports are estimated to have increased by 41.4% year-on-year, driving overall company performance, while domestic sales likely declined by 15%. Cho noted, "While the entry rate into mainstream channels in the United States has remained largely unchanged, the expansion of exports to Europe and Southeast Asia is a positive development." He continued, "The proportion of sales from the United States and Europe, which have relatively higher unit prices than the previous quarter, is expected to rise, resulting in a slight improvement in the regional mix. Even after accounting for increased variable costs (such as transportation and storage) due to higher export volumes, the increase in the SG&A ratio should be limited, allowing the operating margin to once again surpass 20%."

Cho believes that export momentum, rather than tariff concerns, will be the key factor going forward. He stated, "The record stock price rally seen last year has not continued recently due to concerns over potential U.S. tariffs." However, he added, "Given the strong dollar, high gross profit margin, low price sensitivity, and strong brand power, concerns over tariffs are excessive." He went on to say, "In the short term, the second Miryang plant is scheduled to open at the end of May, and in the long term, the opening of a local plant in China at the end of January 2027 is expected to accelerate top-line growth. Samyang Foods is setting an example in the domestic food and beverage market, where quantitative growth has clearly reached its limits."

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