[Click eStock] "Samyang Foods Expected to Raise Prices in the Americas... Target Price Increased to 1.6 Million Won"

On August 18, IBK Investment & Securities announced that it is raising its target price for Samyang Foods by 10.3% to 1.6 million won, reflecting the potential for price increases in the Americas, while maintaining its 'Buy' investment rating.

Kim Taehyun, an analyst at IBK Investment & Securities, stated, "A price increase of around 10% is expected in the Americas in the fourth quarter." He explained, "Local demand for Buldak Bokkeum Myeon remains strong, the last price hike was in 2022, and a domestic competitor recently raised prices in the US market. Therefore, Samyang Foods is unlikely to face significant resistance to a price increase."

Samyang Foods' consolidated sales for the second quarter of this year reached 553.1 billion won, up 30.3% year-on-year and in line with the consensus estimate of 548.7 billion won. Operating profit rose by 34.2% to 120.1 billion won, but fell short of the market consensus of 129.2 billion won. The main reason cited was a larger-than-expected increase in selling and administrative expenses, including salaries (10.1 billion won), advertising and promotion costs (9.8 billion won), and commission fees (4.4 billion won).

Export growth momentum continued. Noodle and snack exports totaled 424.6 billion won, up 31.9% year-on-year, and for the first time, quarterly sales in the noodle and snack segment (domestic + export) surpassed 500 billion won. In the Americas, sales reached 132 billion won, a 35.3% increase year-on-year, as distribution expanded beyond Walmart and Costco to include Target, Kroger, HEB, and new entry into Sam's Club. In China, sales rose 33.4% to 125.6 billion won, driven by an expanded network of local distributors and increased presence in snack channels. Europe also saw a sharp increase, with sales jumping 103.8% quarter-on-quarter to 50.1 billion won.

On the production side, only 3 out of 6 lines at the Miryang Plant No. 2 are currently operating, with the utilization rate estimated at around 25%. Analyst Kim projected, "The utilization rate is expected to gradually rise, and by December, all six lines will be running both day and night shifts." He also noted that, since a certain amount of inventory was shipped in advance to the US subsidiary in the second quarter, tariff burdens in the third quarter are expected to be limited.

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