[Click eStock] "Samyang Foods Expected to Maintain High Operating Margin"

On the 4th, IBK Investment & Securities analyzed that Samyang Foods will maintain a high operating margin. Accordingly, they maintained a 'Buy' investment rating and a target price of 720,000 KRW.

Kim Taehyun, a researcher at IBK Investment & Securities, stated, "Since a certain percentage of operating profit has been set aside as reserves related to year-end bonuses, concerns about one-time expenses in the fourth quarter are limited."

Expectations for expanded exports to the United States remain high due to a significant shortage of supply compared to demand. Among U.S. corporate sales, Walmart, which holds the largest share (19.4% in the third quarter), sells Buldak Bokkeum Myun in all stores but is unable to fully stock the shelves. The second largest, Costco (7.8%), has an entry rate of only about 50% so far.

Researcher Kim explained, "Since September, new entries have been made into Target, and the entry rate into Kroger is also expanding, so if supply becomes smooth in the future, these will emerge as key distribution channels."

Expectations for new entries into regional supermarkets are also valid. Kim analyzed, "In Europe, expansion is ongoing mainly through mainstream channels in the Netherlands, Germany, and Poland, and after the operation of the Miryang 2nd factory, the expansion of the sales network through the European sales corporation is expected to accelerate."

The Miryang 2nd factory, currently under construction, is expected to begin commercial production by July next year at the latest. Meanwhile, the possibility of establishing overseas production plants is also being considered, and additional expansions are under review.

Researcher Kim diagnosed, "Once the Miryang 2nd factory is completed, production capacity will increase by about 40% compared to the existing capacity (existing 1.8 billion units + new 700 million units), but considering the still high consumer demand and potential for distribution network expansion in key regions such as the U.S., Europe, and China, the initial operating rate may rise faster than expected."

He added, "In the early stages of the Miryang 2nd factory's operation, the focus will be on supplying the U.S. and European markets, where the average selling price (ASP) is higher, mainly with bagged noodles."