"Strong Buldak Demand Continues": Kyobo Securities Maintains Samyang Foods Target Price at 1.86 Million Won [Click eStock]

Kyobo Securities: "Samyang Foods' Earnings Improvement Expected to Continue"

On July 20, Kyobo Securities stated that demand for Samyang Foods' Buldak Bokkeum Myun remains strong and maintained its "Buy" investment rating and a target share price of 1.86 million won.

It projected that Samyang Foods’ consolidated sales and operating profit for the second quarter would meet market expectations, at 750 billion won (up 37% year-on-year) and 178.9 billion won (up 39% year-on-year), respectively.

Woojeong Kwon, a researcher at Kyobo Securities, wrote in a report released that day, "In the U.S. market, we believe volume expansion continued in the second quarter, mainly through Kroger and Target channels," adding, "Currently, a Japanese competitor is conducting aggressive marketing at Walmart, so volume is being ramped up mainly through Kroger and Target."

The report also highlighted that, "While ramen export data from the Korea Customs Service for the second quarter remained solid, considering some shipment delays and transportation times, it is expected to be reflected more substantially in third quarter sales."

Regarding the Chinese market, Kwon expected, "With the Chinese yuan showing relative strength, solid growth likely continued at existing leading channels such as snack shops and major distributors." He added that the new China plant is scheduled to begin trial operations by year-end and enter full-scale production next year, making the production capacity (CAPA) expansion momentum valid.

He continued, "The production capacity at Milyang Plant 2 also reached near full operation within a year, demonstrating that excess demand in the global market continues unabated. The fact that demand is rising quickly enough to anticipate additional capacity expansion beyond the China plant is also positive," he analyzed. "As robust second quarter exports are reflected in third quarter results, performance momentum is expected to expand further in the second half of the year," he emphasized.

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