[Click eStock] Samyang Foods, Recent Stock Price Decline Is an Opportunity to Increase Holdings

Kiwoom Securities stated on the 16th that although Samyang Foods' recent stock price has declined, the growth trend centered on the US and Europe is expected to continue. Accordingly, they maintained their investment opinion of 'Buy' and the target price of 830,000 KRW.

Researcher Park Sang-jun analyzed in the report on the same day, "On the day of the earnings announcement, the stock price experienced significant intraday volatility due to profit-taking," adding, "However, there is no major change in the growth trend focused on the US and Europe, along with the 40% expansion of production capacity (CAPA) scheduled for May next year. Therefore, the recent stock price decline and valuation adjustment should be viewed as an opportunity to increase holdings."

Samyang Foods' consolidated sales for the second quarter amounted to 424.4 billion KRW, a 49% increase compared to the same period last year, and operating profit reached 89.5 billion KRW, up 103% during the same period.

Researcher Park Sang-jun explained, "Despite the burden of wage increases, advertising expenses, and logistics costs, both sales and operating profit exceeded market consensus due to the expansion of export proportions centered on the US and Europe," adding, "In particular, sales in the US and Europe maintained a quarterly growth rate of over 30%, driving increases in average selling price (ASP) and sales volume."

He expects the high-growth trend to continue in the mid to long term. Researcher Park said, "In the mid-term, sales and profit growth phases are expected to continue, supported by entry into major US supermarkets and expansion of shelf space, export expansion to Mexico and Canada, and increased market penetration through the establishment of local sales subsidiaries in Europe," forecasting, "Since demand is rising in high-price regions, sales and profit growth rates are expected to surpass sales volume growth rates."