'Buldak' Sales Hit Trillions... Owner Family Wealth Soars [Business & Issues]

Stock Price Surges 5x in One Year
Samyang Round Square Stake Value Increases by 1 Trillion Won
Owner's Wealth Soars Amid Buldak Bokkeum Myeon Craze

On March 6, Kim Jeong-su, Vice Chairman of Samyang Foods, delivered a commemorative speech at the groundbreaking ceremony of the second Milyang factory held at the Nano Convergence National Industrial Complex in Bubuk-myeon, Milyang-si, Gyeongnam. [Image source=Yonhap News]

As Samyang Foods' stock price continues its soaring run, the assets of the owner family have also surged dramatically. This is because the value of Samyang Foods' shares held by Samyang Round Square, the holding company within the group owned over 70% by the owner family, has increased by more than 1 trillion KRW in just one year. With the overseas export boom of Samyang Foods' flagship product, Buldak Bokkeum Myun (Hot Chicken Flavor Ramen), leading to a record-breaking performance streak, the stock price, which has now soared to the 500,000 KRW range, is expected to rise even further.

Samyang Foods' Largest Shareholder 'Samyang Round Square' Sees Share Value Increase by Over 1 Trillion KRW in One Year

As of the end of the first quarter of 2024, the shareholder composition of Samyang Foods. [Image source=Financial Supervisory Service Electronic Disclosure System]

According to the Financial Supervisory Service's electronic disclosure system, Samyang Round Square is the largest shareholder of Samyang Foods, holding 34.92% (2,600,587 shares) of the company's stock. With the recent surge in Samyang Foods' stock price, the value of shares held by Samyang Round Square increased from 266.7 billion KRW at the end of May last year to 1.4178 trillion KRW as of May 28 this year. This represents a rapid increase of more than 1.1511 trillion KRW in share value in just one year.

Accordingly, the assets of the Samyang Foods owner family, who control Samyang Round Square, have also grown significantly. According to the consolidated audit report of Samyang Round Square disclosed in April 2023, the largest shareholder of Samyang Round Square is Kim Jeong-su, Vice Chairman of Samyang Foods, holding 32.0% of the shares. The second largest shareholder is Jeon Byung-woo, Executive Director (24.2%), and the third is Jeon In-jang, former Chairman of Samyang Foods (15.9%). The remaining 27.9% of shares are treasury stock. This means that the owner family controls a total of 72.1% of the shares, making it a family-controlled company.

The value of Samyang Foods shares directly held by the owner family also increased significantly. The value of the shares (4.33%) held by Vice Chairman Kim Jeong-su rose from 34.2 billion KRW at the end of May last year to 175.6 billion KRW as of May 28 this year, an increase of 141.4 billion KRW. During the same period, the value of shares (3.13%) held by former Chairman Jeon In-jang also grew from 24.8 billion KRW to 127.2 billion KRW. The increase in share value held directly by the second-generation owner couple alone amounts to 268.6 billion KRW, which is about twice the total operating profit of Samyang Foods last year, which was 146.8 billion KRW.

Additionally, dividends received by the owner family have also increased significantly. Last year, Samyang Foods raised its per-share dividend from 1,400 KRW to 2,100 KRW, a 50% increase, combining interim and year-end dividends, and paid out approximately 15.6 billion KRW in dividends. Since Samyang Round Square and the owner family hold about 45% of Samyang Foods' total shares, it is estimated that the owner family received around 7 billion KRW of the total dividends.

Earnings Surprise Amid Buldak Bokkeum Myun Craze... Stock Price Continues Soaring

The surge in Samyang Foods' share value is attributed to increased exports and improved performance centered on its flagship product, Buldak Bokkeum Myun. On a consolidated basis, Samyang Foods recorded its highest-ever performance last year with sales of 1.1929 trillion KRW, a 31% increase from the previous year, and operating profit of 146.8 billion KRW, a 62% surge.

In particular, Buldak Bokkeum Myun gained huge popularity overseas, especially in the United States, driving a sharp increase in sales and boosting performance. Samyang Foods' overseas sales last year reached 809.3 billion KRW, a 34% increase from the previous year, surpassing 800 billion KRW for the first time in history, and the proportion of overseas sales in total sales expanded significantly to 68%.

Despite a sluggish domestic economy, export growth has driven the growth trend, and the stock price has continued its soaring run this year. Samyang Foods' stock price, which was 234,500 KRW at the beginning of the year, surpassed the 300,000 KRW mark in early this month, reaching 302,500 KRW, and closed at a record high of 539,000 KRW on May 28.

Strong performance in the first quarter of this year has also sustained the upward momentum in the stock price. Samyang Foods' consolidated sales in the first quarter increased by 57.1% year-on-year to 385.7 billion KRW, and operating profit surged 235.7% to 80.1 billion KRW. Sales in North America and China increased by 222.5% and 186.2% year-on-year respectively, driving the performance improvement.

"Still Undervalued"... Could Surpass 600,000 KRW

The appearance of Samyang Foods' 'Tom Yum Buldak Bokkeumtangmyeon,' which began exporting to the United States last October.

In the securities industry, despite the rapid rise in Samyang Foods' stock price in a short period, it is still considered undervalued, with analysis suggesting additional upside potential to the 600,000 KRW range. The positive performance driven by overseas exports is expected to continue this year.

Sim Eun-joo, a researcher at Hana Securities, said, "Samyang Foods' export volume this year is estimated to increase by 50% from the previous year to 1.2132 trillion KRW, with overseas sales accounting for 77% of total sales. According to the Korea Customs Service, ramen export volume increased by 30.1% in the first quarter and surged 46.8% year-on-year in April. The second quarter includes the 'China 6.18 Shopping Festival,' so the market is likely to exceed expectations."

Han Yoo-jung, a researcher at Hanwha Investment & Securities, also analyzed, "The U.S. subsidiary continues to expand its presence in major large retailers, and the Chinese subsidiary has started full-scale operations this year, so sales expansion is just beginning. Although the stock price has hit historic highs, it is still undervalued due to steep upward revisions in performance forecasts."