Stock Price Rises 63% in One Month
Following Last Year's Hot Dog, Frozen Gimbap Exports Start This Year
Performance Outlook Expected to Improve Due to K-Food Popularity
Riding on the global popularity of K-food and strong product capabilities, Wuyang, which has transformed into an export company, is expanding its presence by actively supplying frozen gimbap to the U.S. market. After proving its potential by exporting hot dogs last year, it has entered a full-fledged growth phase this year.
According to the financial investment industry on the 7th, Wuyang's stock price rose 63.1% over the past month. During the same period, the KOSDAQ index fell 1.7%. It has maintained an upward trend independently of the domestic stock market flow.
Founded in 1992, Wuyang produces quasi-drug foods and ready-to-eat foods, supplying companies such as CJ CheilJedang, Pulmuone Foods, Starbucks, Ediya, and Hollys. With the recent growth of the home meal replacement (HMR) market, it sells its own brands like 'Newtre' and 'Chef Story' directly to consumers. Since 2002, it has produced frozen hot dogs and was the first in Korea to obtain HACCP (Hazard Analysis and Critical Control Points) certification. It supplies CJ CheilJedang's 'Gourmet Hot Dog Crispy' and Pulmuone's 'Saenggadeuk Mozzarella Hot Dog' through OEM (Original Equipment Manufacturing) and ODM (Original Design Manufacturing) methods. Besides hot dogs, it also manufactures easy porridge, cheese balls, and croquettes.
Wuyang owns five factories in Chungnam Seocheon, Cheongyang, and Gyeongbuk Cheongsong. It has vertically integrated production facilities capable of producing everything from raw materials like purees and pastes to finished products such as beverage bases, juices, and HMR. Hot dogs were produced at the Janghang Plant 2 until 2020 and have been produced at the Seocheon Plant since March 2021.
Thanks to the popularity of hot dogs, Wuyang has transformed from a domestic company into an export company. Export revenue grew from 9 billion KRW in 2020 to 22.3 billion KRW last year. It supplies hot dogs to Costco in the U.S. through Pulmuone. The hot dogs supplied to North America last year are likely to become a 'cash cow product' after selling out the initial six-month shipment. In addition to existing distribution channels, hot dog products are also supplied to major U.S. supermarkets.
Starting this year, Wuyang is exporting frozen gimbap to the U.S. market. It has signed contracts with large local distribution chains and expects sales to begin in the second half of the year. Wuyang can produce 900,000 frozen gimbap units per month. In terms of sales, this translates to about 2 to 2.5 billion KRW per month. Hyunjeong Son, a researcher at Yuanta Securities, explained, "Frozen gimbap is a recently trending K-food in the U.S.," adding, "In August last year, frozen gimbap became a hot topic in a TikTok video by a famous overseas influencer." She further stated, "Following the popularity of frozen gimbap, Wuyang plans to expand its sales regions from the U.S. to Southeast Asia and Europe," and "Since it has secured various distribution channels through existing hot dog products, the export of the new frozen gimbap product is expected to accelerate."
Hanwha Investment & Securities estimated that Wuyang will achieve additional sales of 10.8 billion KRW and 19.7 billion KRW from frozen gimbap exports in 2024 and 2025, respectively. Yujeong Han, a researcher at Hanwha Investment & Securities, analyzed, "The average selling price of frozen gimbap is about three times higher than that of hot dogs," and "Considering that the appropriate margin is twice as high as that of hot dogs, the contribution to performance will be significant." She also added, "The Seocheon Plant, which had been operating at a loss since its completion in 2021, is expected to turn profitable due to increased volume," and "Sales estimates for this year will be revised upward."
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