"This Time It's K-Food"...The Surge of Food and Beverage Stocks

Samyang Foods and CJ Seafood Stocks Rise Over 60% This Month
Last Year's Agricultural and Marine Food Exports Hit Record High
Ramen and Gim Exports Continue Steady Growth This Year

Food and beverage-related stocks continue to show a sharp upward trend. This appears to be influenced by expectations of strong performance due to increased K-Food exports.

According to the financial investment industry on the 27th, as of the 24th, the KOSPI food and beverage index rose 11.71% from the end of last month to 4144.95, and the KOSDAQ food and tobacco index also increased by 3.03% to 5894.88. During the same period, the KOSPI and KOSDAQ fell by 0.17% and 3.49%, respectively.

Individual stocks have recorded even higher growth rates. Notably, Samyang Foods, famous for its "Buldak Bokkeum Myun" (Hot Chicken Flavor Ramen), rose 69.54% from the end of last month to 501,000 KRW. Along with this, CJ CheilJedang (7.72%), Dongwon F&B (13.24%), CJ Seafood (82.64%), and Wooyang (55.63%) also far exceeded the KOSPI and KOSDAQ growth rates.

Food and beverage stocks are one of the representative defensive stocks. This is because demand has low price elasticity and there is no speculative demand, so they are less affected by economic fluctuations. As a result, even during periods when stock prices fall, the volatility is not large. However, the recent upward trend seems to be due to a clear increase in exports of domestic food and beverage products. According to the Korea Agro-Fisheries & Food Trade Corporation, last year’s agricultural and fishery food export value reached a record high of 12 billion USD.

Specifically, ramen exports amounted to 952 million USD last year, a 24.4% increase compared to the previous year. This growth trend continues steadily. Last month, ramen exports reached 108.59 million USD, a 46.8% increase compared to the same period last year. This marked the first time monthly exports surpassed 100 million USD.

Joo Young-hoon, a researcher at NH Investment & Securities, said, "The strong performance of ramen exports is expected to continue," adding, "Despite the high base, the export growth rate for ramen from January to April this year exceeded 35% compared to the same period last year." He also noted, "Sales generated through overseas local subsidiaries are also continuously increasing."

Shim Eun-joo, a researcher at Hana Securities, also explained, "The first quarter of this year might be the starting point where the global recognition of ‘K-Food’ was meaningfully reflected in the actual performance of food and beverage companies," adding, "The first-quarter results of ramen companies driving K-Food were remarkable."

The same applies to Gim (seaweed). Last year, seaweed exports reached 791 million USD, a 22% increase compared to the previous year. Last month, exports hit a record high of 53.49 million USD. As a result, the wholesale price of seaweed used for gimbap rose 80.1% compared to the same period last year, surpassing 10,000 KRW per pack of 100 sheets for the first time ever, driving prices higher.

The securities industry advised maintaining a positive outlook on related companies as food and beverage exports continue to expand this year. Researcher Joo Young-hoon emphasized, "While maintaining stable performance in the domestic market, which has been a traditional strength, the popularity of K-Food has greatly increased, accelerating the pace of overseas market penetration," adding, "Companies with an expanding proportion of overseas sales are not only recording high sales growth rates but have also overcome the limitation of a finite domestic market size, which raises expectations for valuation increases."