Improved Performance of Soup Manufacturers Amid Buldak Bokkeummyeon Popularity
Attention on J2K Bio, Raw Material Supplier for COSRX
Active Moves in Securities Firms to Find Hidden Beneficiaries
Samyang Foods and COSRX are each leading the golden age of K-Food and K-Beauty. Samyang Foods' market capitalization, driven by the popularity of Buldak Bokkeum Myun, has surpassed 5 trillion won. Profit estimates continue to be revised upward. The skincare brand COSRX is experiencing explosive growth in the U.S. cosmetics market. COSRX's growth has also significantly contributed to Amorepacific regaining a market capitalization of 10 trillion won. The securities industry is busy searching for 'hidden gems' in the food and beverage and cosmetics sectors, based on the popularity of K-Food and K-Beauty. This is why they are continuously publishing analysis reports on small and mid-cap stocks expected to improve their performance.
According to the financial investment industry on the 18th, Samyang Foods recorded an all-time high of 698,000 won during trading the previous day. After partially giving up some of the gains, it closed at 686,000 won. Its market capitalization reached 5.17 trillion won.
Amorepacific's stock price has also been steadily trending upward since hitting its yearly low on March 19. In three months, the stock price rose by 67.6%. Its market capitalization exceeded 10.8 trillion won.
As the popularity of ramen and cosmetics rises worldwide, K-Food and K-Beauty related stocks are playing a leading role in the domestic stock market. The number of investors trying to gauge the performance of food and beverage and cosmetics listed companies through monthly export trends has increased. As the stock prices of representative listed companies continue to rise, the positive momentum is spreading to surrounding stocks as well.
On the 13th, KB Securities published an analysis report on SND. Founded in 1998, SND is a company that produces ingredients 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 ingredients.
Lim Sang-guk, a researcher at KB Securities, explained, "Samyang Foods' Buldak series sales are increasing mainly in China, Southeast Asia, and the U.S.," adding, "This growth is linked to the co-growth of SND, which exclusively supplies the key raw materials for the liquid and powder soups of the Buldak series." He also noted, "The export growth trend of major clients continues," and "this is a factor in SND's performance increase, and further expansion will be carried out."
SND recorded sales of 23.8 billion won and operating profit of 3.5 billion won in the first quarter of this year, representing increases of 30.8% and 72.2%, respectively, compared to the same period last year. The operating profit margin rose from 11.2% in the first quarter of last year to 14.8%.
SK Securities analyzed J2K Bio the day before. J2K Bio has developed over 2,000 natural and bio materials and solvents based on new natural product technologies and fermented microorganisms. It supplies functional cosmetic new materials such as whitening, anti-wrinkle, UV protection, and sebum control, extracted from natural products and fermented microorganisms, to about 300 client companies.
Heo Seon-jae, a researcher at SK Securities, analyzed, "The production capacity for snail cream and essence raw materials supplied to COSRX is expected to more than double in the second half of this year according to customer demand." He added, "Snail mucus raw material is among the most profitable," and "if the related sales proportion increases, profit margins will also improve."
Heo also explained, "J2K Bio has secured new customers among domestic small and mid-sized ODM (Original Design Manufacturer) companies such as PF Nature and No Ordinary, which are indie brand companies," and "sales growth toward indie brands will continue."
Meanwhile, industry experts agree that for Korean food and cosmetic brands not to end as a 'flash in the pan' in overseas markets, the growth of key partners like SND and J2K Bio is necessary. A financial investment industry official explained, "The popularity of the K-series continues based on the production capacity, technological capabilities, and quality control of partner companies," adding, "performance will improve quarter by quarter."
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