[Special Stock] Samyang Foods Surges on Q1 Earnings Surprise

Samyang Foods surged to the daily price limit after posting earnings at a level considered an earnings surprise in the first quarter.

As of 9:28 a.m. on the 17th, Samyang Foods is trading at 446,500 KRW, up 103,000 KRW (29.99%) from the previous close on the Korea Exchange. The trading volume is 7.07 million shares, with a trading value of approximately 31.6 billion KRW.

The stock also hit a new 52-week high again. The price started sharply higher at 446,500 KRW. Early in the session, strong buying pressure triggered the volatility interruption (VI) mechanism.

With this, Samyang Foods has continued its upward trend for six consecutive trading days since the 9th.

Samyang Foods announced yesterday that it recorded consolidated sales of 385.7 billion KRW and operating profit of 80.1 billion KRW in the first quarter of this year. This significantly exceeded the operating profit consensus of 42.4 billion KRW (the average market forecast). The company’s performance is generally considered an earnings surprise when it exceeds consensus by more than 10%.

In particular, overseas sales grew 85% year-on-year, reaching 286 billion KRW in quarterly sales. It is believed that 'Carbo Buldak' gained great popularity through overseas social networking services (SNS). Additionally, the effect of the rising exchange rate appears to have been partially reflected.

Brokerages have also raised their target prices one after another. Despite the higher expectations, the rapid growth in earnings leads to the analysis that the stock is still undervalued. Hanwha Securities doubled its target price from 300,000 KRW to 600,000 KRW. Daishin Securities raised its target price from 320,000 KRW to 500,000 KRW, and IBK Investment & Securities also increased its target price from 290,000 KRW to 460,000 KRW.