"Target Stock Price 1 Million Won"... Will Samyang Foods Become the Emperor Stock Next Year?

Hanwha Investment & Securities Raises Target Price to 1 Million Won
First Since 2014 Ottogi Royal Stock
First Overseas Factory Established... Targeting Chinese Market
Production Capacity for North American and European Export Volumes Created

In the securities market, a target stock price of 1 million KRW has emerged for Samyang Foods. Attention is focused on whether an emperor stock will be born in the food and beverage sector for the first time in 10 years since Ottogi in 2014.

On the 23rd, Hanwha Investment & Securities raised Samyang Foods' target stock price to 1 million KRW based on ▲ the highest sales growth rate ▲ the highest profitability ▲ utilization of the Buldak intellectual property (IP). This price is 25% higher than the previous target price. Earlier, Kiwoom Securities raised its target price from 800,000 KRW to 950,000 KRW, and DS Investment & Securities raised it from 720,000 KRW to 850,000 KRW.

The upward revision of the target price is due to Samyang Foods' growth in overseas markets. In particular, exports to the United States stand out. The export amount to the U.S. surged from 55.8 billion KRW in 2022 to 246.7 billion KRW in 2024. The explosive growth in U.S. sales was largely due to the role of the U.S. sales corporation established in August 2021.

Han Yoo-jung, a researcher at Hanwha Investment & Securities, analyzed, "After the establishment and stabilization of the sales corporation, entry into main channels and marketing activities tailored to the local market situation have been in full swing," adding, "The U.S. instant noodle market share in 2024 is 8.1%, narrowing the gap with the Japanese traditional noodle company 'Nissin'." Currently, in the U.S., Samyang Foods is increasing the number of stores in Walmart and Costco while expanding the number of product items.

Samyang Foods currently owns factories in Wonju, Iksan, and Miryang (Plant 1). The production capacity (CAPA) of these three factories is 1.3 trillion KRW. The estimated consolidated sales for Samyang Foods in 2024 are 1.7 trillion KRW. Although the Miryang factory, completed in March 2022, is producing the maximum volume with two shifts, supply is struggling to keep up with the increasing overseas demand.

As exports continued to increase, Samyang Foods decided to invest in Miryang Plant 2 in September 2023. After the completion of Miryang Plant 2 in May 2025, entry into stores in Latin America and Europe through these channels is expected to accelerate. Meanwhile, Samyang Foods announced the establishment of its first overseas production plant on the 16th, just 1 year and 3 months after deciding to invest in Miryang Plant 2.

The first overseas production plant is not in North America but in China. The Chinese plant is scheduled to be completed in January 2027, initially deploying a total of six production lines. In terms of amount, it is estimated to have a production scale capable of at least 600 billion KRW and up to 700 billion KRW. When reflecting the full-year effect of the 2027 Chinese plant expansion, consolidated sales are expected to expand up to 2.8 trillion KRW.

Jo Sang-hoon, a researcher at Shinhan Investment Corp., evaluated, "By having local production facilities, rapid response is possible in the Chinese market, which is the largest single country (25%) and a high-growth market," adding, "After 2027, the domestic Miryang plant will be able to focus solely on Western markets (U.S., Europe, etc.), accelerating global penetration."

According to the Q4 earnings consensus for Samyang Foods compiled by FnGuide, sales are expected to increase by 31.1% year-on-year to 428.5 billion KRW, and operating profit is expected to surge by 126.6% to 82 billion KRW. The earnings consensus has been continuously rising since the beginning of the year.

Sim Eun-joo, a researcher at Hana Securities, analyzed, "Samyang Foods' export amount in October and November increased by 31.4% compared to the same months last year," adding, "Considering the relatively high overseas average selling price (ASP) and favorable exchange rates, the export growth rate is expected to be around 45%." The marketing burden in the U.S. and China is partially offset by favorable exchange rates.

Expectations for earnings are being immediately reflected in the stock price. During December, Samyang Foods' stock price rose sharply by 37.5%, from 552,000 KRW (December 2) to 759,000 KRW (December 23) based on closing prices. During the same period, foreigners and institutions net purchased 48.2 billion KRW and 62.3 billion KRW, respectively. Despite the stock market faltering due to foreign investors exiting, the stock price is showing a steady upward trend.

Jang Ji-hye, a researcher at DS Investment & Securities, diagnosed, "Considering that the average price-to-earnings ratio (PER) of the KOSPI and KOSPI food and beverage indices is around 10 times, the level is high, but Samyang Foods' earnings per share (EPS) growth rate is expected to continuously outperform the market average and domestic and international competitors," adding, "Although there is a burden from the short-term rapid stock price rise, we maintain our top pick opinion in the sector."