[Click e-Stock] "Samyang Foods' Earnings Power Confirmed... Target Price Raised"

Target Price Raised from 1.05 Million Won to 1.25 Million Won

On May 16, KB Securities raised its target price for Samyang Foods from 1.05 million won to 1.25 million won, stating that the company's earnings power was confirmed through its first-quarter earnings surprise. The investment opinion was maintained at 'Buy'.

KB Securities analyst Ryu Eunae explained, "The main reason for raising the target price is the upward revision of operating profit estimates for 2025 and 2026 by 23.3% and 12.9%, respectively, based on the earnings power confirmed in the first-quarter earnings surprise." She added, "Based on the closing price on May 15, the potential upside is 26.1%. We are maintaining our investment opinion and our view that Samyang Foods is a key stock in the food and beverage sector."

In the first quarter, Samyang Foods posted consolidated sales of 529 billion won, up 37.1% year-on-year, and operating profit of 134 billion won, up 67.2%. Analyst Ryu noted, "Operating profit exceeded the consensus (the average of securities firms' forecasts) by 28.3%, marking an earnings surprise." She analyzed, "Exports of noodles and snacks increased by 32.2%, and under favorable dollar and yuan exchange rates, sales at the US and China subsidiaries grew by 20.1% and 11.8%, respectively, compared to the previous quarter." She added, "The operating profit margin reached 25.3%, hitting an all-time high as the cost of raw materials such as wheat stabilized and the improved sales mix contributed positively."

Supply expansion is expected to accelerate with the completion of the Miryang Plant No. 2 at the end of June. Analyst Ryu stated, "From the third quarter, supply will be expanded mainly in strategic countries such as the US, which will allow us to confirm both top-line growth and improved profitability." She added, "With demand remaining robust, a significant increase in sales volume is expected, particularly in the US mainstream market."

Concerns are expected to ease. Analyst Ryu predicted, "With the short-term uncertainty resolved by the mutual tariff suspension in the second quarter, concerns about a weaker exchange rate in the second half will be mitigated by the potential for price increases on US products."