[Click eStock] "Samyang Foods, Stable Export Trend to China Continues"

[Asia Economy Reporter Ji-hwan Park] Daishin Securities on the 18th maintained a 'Buy' rating and set a target price of 160,000 KRW for Samyang Foods, stating that the stability of exports to China, which accounts for the largest share of its overseas export sector, continues.

Yu-jeong Han, a researcher at Daishin Securities, evaluated, "It is encouraging that the export trend in China, which has the highest export ratio, shows stable growth, and the share in other countries is expanding."

It is analyzed that the positive and negative effects caused by the novel coronavirus disease (COVID-19) are mixed, so the base burden for 2021 is not expected to be significant. In the third quarter, although sales volume of bagged noodles of major brands continues to increase, ramen sales revenue is estimated to grow by only 1% year-on-year due to a decrease in sales volume of cup noodles, which are mainly sold through convenience store channels.

Researcher Han said, "With the expansion of B2B clients, sales revenue in the seasoning materials sector is expected to increase by 5% year-on-year, continuing to contribute steadily to performance," and added, "The cumulative export amount to China in July and August increased by 33% compared to the same period last year, showing solid performance."

Ahead of the largest consumer event in China in the second half of the year, the Singles' Day, an increase in export amounts is expected in September and October, and the cumulative export amount outside China in July and August is forecasted to increase by 55% year-on-year.

Researcher Han projected, "Due to the reduction of foreign exchange effects in the second half of the year and normalization of the surge in stockpiling demand in both domestic and export markets during the early stages of the COVID-19 outbreak, a decline in profitability in the second half compared to the first half seems somewhat inevitable."