[Special Stock] 'Food = Domestic Demand' Is a Thing of the Past, Samyang Foods and Lotte Wellfood Hit 52-Week Highs

Samyang Foods Hits 52-Week High After 2 Trading Days
Lotte Wellfood Hits 52-Week High for 3 Consecutive Trading Days
Grain Price Decline and Export Boom Brighten Industry Outlook

Shares of food companies are fluctuating. Samyang Foods and Lotte Wellfood have once again hit 52-week highs during trading. This is interpreted as being influenced by the decline in grain prices and strong export performance.

[Image source=Yonhap News]

As of 9:44 AM on the 7th, Samyang Foods is trading at 314,000 KRW, up 3.63% (11,000 KRW) from the previous close. It surpassed the 52-week high of 310,500 KRW recorded on the 2nd after just two trading days. Lotte Wellfood rose 3.52% to 141,300 KRW. Lotte Wellfood has recorded a 52-week high for three consecutive trading days. In addition, food-related stocks such as Nongshim (0.75%), CJ CheilJedang (1.03%), and Ottogi (0.71%) are generally rising.

Recently, the decline in grain prices and improvement in export performance have turned the food industry outlook positive. According to the Korea Rural Economic Institute, the international corn futures price fell from $186 per ton at the end of last year to $173 per ton at the end of last month. Soybeans also dropped from $475 to $421, and wheat from $231 to $215.

Riding the recent K-Food wave, Samyang Foods’ exports accounted for 67% of its total sales of 1.1929 trillion KRW last year, amounting to 809.3 billion KRW. Nongshim also generated 37% of its sales overseas, while CJ CheilJedang’s export ratio was 17.2%. Due to the nature of the industry, which traditionally had a high domestic sales ratio, the current situation differs from the past when companies struggled with high exchange rates. Han Yujeong, a researcher at Hanwha Investment & Securities, said, "The food and beverage sector has undergone a transformation from its past form, so the impact of exchange rate fluctuations will vary by company," adding, "Companies with high M&A activity or a large overseas presence are not disadvantaged by a weak Korean won."