K-Ramen Overshadowed by Semiconductors... Will It Heat Up Again in the Second Half?

Samyang Foods and Nongshim See Fewer Minority Shareholders in H1
Securities Analysts Raise Target Prices on Strong Overseas Sales

Despite robust performance in the first half of this year driven by global popularity, K-Ramen stocks have been largely disregarded by minority shareholders in the domestic stock market. This trend is attributed to the concentrated shift toward semiconductor stocks that has been evident in the domestic market since the beginning of the year.

According to the Financial Supervisory Service’s DART system on August 20, the number of minority shareholders of Samyang Foods at the end of the first half stood at 64,947, a decrease of 9.2% (6,557 shareholders) compared to the end of last year. Nongshim also saw its minority shareholders drop by 3.5% (1,603 shareholders), from 45,210 at the end of last year to 43,607 at the end of June this year.

Samyang Foods and Nongshim are leading domestic food companies that experienced a sharp uptick in minority shareholders last year, thanks to the rise in overseas sales of K-Food. In particular, Samyang Foods’ stock price has surged dramatically over the past three years, prompting stock market analysts to refer to it as the so-called "Buldak Semiconductor." The stock price of Samyang Foods jumped more than tenfold, from 107,000 won at the end of June 2023 to 1,125,000 won at the end of the first half of this year.

At the end of 2024, Samyang Foods had only 32,616 minority shareholders, and by the end of the first half the following year, the number reached 38,436. However, there was a rapid increase during the latter half of last year, with the figure peaking at 71,504 by year-end before declining this year. Similarly, Nongshim’s minority shareholders increased from 24,445 at the end of 2024 to 45,210 at the end of last year, but the number has since trended downward.

As a result of the global popularity of K-Food, the number of minority shareholders investing in domestic food companies, including Samyang Foods and Nongshim, surged along with rising overseas sales shares. CJ CheilJedang, for instance, saw an increase of 40% in minority shareholders to 92,139 at the end of last year compared to the previous year. Orion also recorded a 6.1% increase over the same period, reaching 42,317. In addition, Ottogi’s minority shareholders grew by 35.3% year-on-year, totaling 37,321.

However, as the bias towards large-cap semiconductor stocks such as SK hynix and Samsung Electronics intensified during the first half of this year, individual investors appeared to shift their investments from food companies to semiconductor stocks, leading to a change in the trend of minority shareholder numbers. The domestic stock market, in the first half of the year, continued on an upward trajectory supported by the artificial intelligence (AI) investment boom and the rally in large-cap semiconductor stocks like Samsung Electronics and SK hynix. Funds from retail investors were also heavily concentrated in the semiconductor sector via leveraged single-stock exchange traded funds (ETFs). A Samyang Foods representative explained, "We believe the decline in minority shareholders is due to the increased attraction of semiconductor stocks."

The proportion of shares held by minority shareholders at Samyang Foods and Nongshim also decreased slightly as a result of the overall decline in shareholder numbers. Samyang Foods’ minority shareholder ratio dropped from 47.2% at the end of last year to 46.6% at the end of the first half of this year, while Nongshim’s ratio declined from 38.1% to 35.5% over the same period.

Securities analysts are now increasingly raising their target prices for Samyang Foods and Nongshim, both of which posted strong results in the second quarter based on strong overseas sales. According to FnGuide, a financial information provider, the target price for Samyang Foods is listed at 1,856,429 won, and for Nongshim, 564,615 won. The securities industry expects further growth, citing continued sales expansion in overseas markets and the potential for mid- to long-term revaluation of both companies’ valuations.

Choi Goun, a researcher at Korea Investment & Securities, commented on Samyang Foods, "Given the higher growth rates in the U.S. and Europe, there is no reason to worry about Buldak’s prospects. Although export momentum slowed after last summer and operating profit margins dipped, raising doubts about this year’s growth, the company has ultimately demonstrated its performance, regaining profit visibility. Now, expectations are rising for the expansion of the Jiaxing plant in China, which will be completed in less than half a year." Cho Sanghoon, a researcher at Shinhan Investment & Securities, said of Nongshim, "The outlook reflects the impact of domestic price increases and the recovery of overseas sales. While overseas growth momentum weakened over the past two years, recovery has begun this year, raising hopes of a share price rebound."

Meanwhile, Samyang Foods’ share price fell to just above 1 million won per share in March and June, but began rebounding last month and recovered to 1.3 million won this month. Nongshim’s share price, which had been above 400,000 won per share at the start of the year, dropped to the 300,000 won range in June but has been on an upward trend again since last month.

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