S&D is showing strong performance. It appears that securities firms' analysis, which expects joint growth with major clients due to the K-Food boom, is influencing the stock price.
As of 9:30 AM on the 13th, S&D is trading at 42,800 KRW, up 18.72% from the previous day.
Founded in 1998, S&D is a company that produces raw materials for general functional foods and health functional foods. It has about 158 clients including Samyang Foods, Nongshim, Pulmuone, and CJ CheilJedang. It produces over 230 types of food materials.
Im Sang-guk, a researcher at KB Securities, explained, "Samyang Foods' Buldak series sales have been continuously increasing, mainly in China, Southeast Asia, and the United States," adding, "This is directly leading to joint growth with S&D, which exclusively supplies the core raw materials for the Buldak series' liquid and powder sauces."
In the first quarter, the company recorded sales of 23.8 billion KRW and operating profit of 3.5 billion KRW, representing increases of 30.8% and 72.2% respectively compared to the same period last year.
Researcher Im estimated, "Due to the ongoing global K-Food boom, especially the Buldak series, sales of general functional food materials to major clients increased by 42.7% year-on-year," and analyzed, "Operating profit margin also rose from 11.2% in the first quarter of last year to 14.8%."
He forecasted, "The global spread of K-Content is expanding the K-Food boom, leading to increased overseas exports by major clients," and added, "This is a factor driving S&D's performance growth, and further capacity expansions will be carried out."
Additionally, he emphasized, "As of the end of the first quarter this year, the retention ratio is 4305%, return on equity (ROE) is 12.7%, cash assets are approximately 62 billion KRW, and the company operates without debt, indicating a very sound financial structure." He analyzed, "The current stock price is trading at a price-to-earnings ratio (PER) of 8.1 times based on this year's expected performance," and "This is a significant discount compared to the average PER of 16.1 times for peer companies and major clients."
Researcher Im also expressed expectations, saying, "Regarding health functional food materials, S&D has applied for individual recognition approval for Injinssuk green tea extract (MPGT), a functional material for improving stomach function, expanding from the existing sleep improvement individual recognition raw materials," and added, "This could act as a factor for future sales growth."
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