Samyang Foods, Reliant on Overseas Sales, Plunges 8.9% as Won Strengthens [Click eStock]

Hanwha Investment & Securities: "Fundamentals Remain Unchanged"

Hanwha Investment & Securities said on the 28th that it is maintaining its target price of 1.8 million won and its "Buy" rating on Samyang Foods, which is exposed to the impact of a stronger won because of its high share of overseas sales. The stock has 61.3% upside from its closing price of 1,116,000 won on the 26th, the brokerage said.

Samyang Foods shares fell 8.9% on the 26th, underperforming the KOSPI, which fell 1.5%, by 7.4 percentage points. On days when the KOSPI has declined, this was the stock's second-steepest drop in the past 10 years, after its 7.6-percentage-point underperformance on July 25, 2024.

Han Yoo-jung, an analyst at Hanwha Investment & Securities, said, "We believe selling was concentrated in Samyang Foods, which generates 83% of its sales overseas, as concerns over weak third-quarter results coincided with the won-dollar exchange rate falling to the 1,320-won range during the trading session."

However, earnings expectations remain unchanged. The consensus forecast for third-quarter operating profit was 184.7 billion won, just 1.6% lower than a month earlier, mainly due to delays in some shipments. Although the share price has fallen 28% since its late-August peak, the 2027 consensus forecast for operating profit has remained nearly unchanged at 893.7 billion won, bringing the 2027 price-to-earnings ratio (PER) down from 16.6 to 12.0.

"Pricing and product competitiveness remain strong despite the stronger won"

Since the September FOMC meeting, the won has appreciated 3.8% against the U.S. dollar, while the yen has depreciated 1.2% and the Taiwan dollar 2.4%. The yuan is also at its highest level in four years, so the exchange-rate gap with competitors in the Chinese market is not significant.

Analyst Han noted, "A stronger won is unlikely to weaken the company's price competitiveness overseas." Overseas selling prices are set in local currencies, meaning that a stronger won affects sales converted into won and profitability, rather than consumer prices, she explained.

Exports in dollar terms are also holding up well. South Korea's noodle exports totaled $1.41 billion from January through September, up 25%. Exports from September through October 20, adjusted for the difference in the timing of the Chuseok holiday, totaled $280 million, up 30%.

Price increases have also paid off. Samyang Foods raised overseas prices by about 10% in 2022 and again in October 2025. According to Euromonitor, Samyang Foods' retail sales in the U.S. rose 51% in 2022, when average unit prices in the U.S. noodle market increased 15%, and rose 38% in 2025, when unit prices increased 8%. In 2025, sales at overseas competitors Nissin and Nongshim fell 2% and 1%, respectively. Analyst Han said, "There is no evidence in the figures of consumer resistance to the price increases."

She said there is a strong case for further price increases in 2027. In addition to the stronger won, wheat prices and energy and shipping costs have risen sharply, while palm oil prices have also increased since the start of the year. Hanwha Investment & Securities forecast that operating profit will rise 37.8% to 722 billion won this year and 27.2% to 919 billion won next year.

Analyst Han said, "Concerns that a falling exchange rate will weaken profitability have already been reflected in the share price," adding, "The fundamentals have not changed."

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