"Sorry for Underestimating, Headed for 1.7 Million Won"... 'Myeonvidia' Emerges as Emperor Stock [This Week's Hot Stock]

Over 1 Million Won Per Share: Samyang Foods Becomes an 'Emperor Stock'
Soaring Share Price Pushes Market Cap into Top 50
'Buldak' Series Drives 80% of Revenue from Overseas
MSCI Korea Index Inclusion Fuels Further Stock Gains
Securities Firms Raise Target Price to Over 1.3 Million Won

Editor's Note
To all retail investors dreaming of successful investments: How well do you really know the stocks you buy with your own money? In an online environment overflowing with unfiltered information, Asia Economy aims to be your hands, feet, eyes, and ears, delivering accurate information about companies. Each week, we focus on companies that ranked high in search volume on FnGuide, a financial information provider, and deliver not only the basics but also analyses of related companies such as partners, clients, and investors. We will break down corporate financials, performance, and future value in an easy-to-understand way. We bring you this week's featured stock, under the title 'This Week's Hot Stock,' every week.

'Buldak Semiconductor' and 'Myeonvidia'?these are the nicknames that retail investors use for Samyang Foods. The company is being compared to Nvidia due to its rapidly rising stock price. As the 'Buldak' series has driven performance, particularly in overseas markets, Samyang Foods' share price recently surpassed 1 million won. Currently, Samsung Biologics is the only other stock in the Korean market trading above 1 million won. In the securities industry, interest is growing, with target prices for Samyang Foods, which has emerged as a new 'emperor stock,' being raised to as high as 1.7 million won.

80% of Revenue from Overseas... Record Results Driven by Exports

On May 12, Samyang Foods became an 'emperor stock' during trading hours, and after announcing record-breaking Q1 results, it hit an all-time high on May 15. The share price, which was in the 300,000 won range just a year ago, soared to 1,233,000 won that day, entering the top 50 in market capitalization. Securities firms, which had previously set target prices at 1.3 million won, admitted they had underestimated the company and raised targets as high as 1.7 million won. As of the closing price on May 20, Samyang Foods maintained its emperor stock status at 1,144,000 won.

Samyang Foods' Q1 sales reached 529 billion won, up 37% year-on-year, and operating profit soared 67% to 134 billion won, marking the company's highest-ever quarterly performance. After surpassing 300 billion won in overseas sales in Q2 last year, the company exceeded 400 billion won for the first time this quarter.

Exports were the driving force behind these record results. About 80% of Samyang Foods' total revenue comes from overseas. The recent rise in the won-dollar exchange rate allowed the company to benefit from foreign exchange gains when receiving export payments in dollars, contributing to improved performance. While competitors like Nongshim produce some products overseas, Samyang Foods manufactures all its export ramen domestically. This means that even with the same sales volume, revenue and profit increase more. Samyang Foods' sales, which stood at around 90 billion won in 2016, reached a record 1.3359 trillion won last year, marking the first time overseas sales surpassed 1 trillion won.

At the center of this performance is the 'Buldak' series. In 2014, after the YouTuber 'Korean Englishman' posted a popular video of himself and friends eating Buldak Bokkeum Myeon, the so-called 'Buldak Bokkeum Myeon Challenge' spread worldwide, expanding exports to about 100 countries. In the US, sales through major retail channels such as Walmart, Costco, and Kroger increased, resulting in Q1 sales of approximately 127 billion won, up 62% year-on-year.

There have even been reports apologizing for underestimating Samyang Foods' growth potential. Kim Taehyun, a researcher at IBK Investment & Securities, stated in a report titled 'Sorry, We Underestimated You' that "according to Korea Customs Service data, April ramen exports grew 24.5% year-on-year to $135.14 million, maintaining solid growth," and added, "The positive impact of the exchange rate is expected to continue into Q2, further boosting export performance."

Solid Performance Expected in the Second Half, Not Even Trump Tariffs Are a Major Concern

Samyang Foods' high growth is expected to accelerate further in line with expanded production capacity. When the Miryang Plant 2, scheduled for completion in the first half of this year, begins operations, the annual maximum ramen production will increase from 1.8 billion to 2.5 billion units, easing supply shortages and strengthening the company's strategy in key markets such as North America and Europe. Additionally, with the new plant in China set to begin operations in 2027, production capacity (CAPA) is expected to expand by 78% compared to current levels.

The stock outlook is also positive. After Samyang Foods posted record Q1 results last week, securities firms simultaneously raised their target prices. IBK Investment & Securities (from 1.08 million won to 1.45 million won), Kiwoom Securities (from 1.2 million won to 1.4 million won), Hana Securities (from 1.1 million won to 1.35 million won), Kyobo Securities (from 1.02 million won to 1.33 million won), Yuanta Securities (from 1.1 million won to 1.31 million won), and Korea Investment & Securities (from 1.1 million won to 1.3 million won) all adjusted their targets to at least 1.3 million won.

Among them, Hanwha Investment & Securities set the highest target price at 1.7 million won. Han Yoojeong, a researcher at Hanwha Investment & Securities, explained in a report titled 'Strong Buy' that "if the Miryang Plant 2 comes online, volume will increase 35% year-on-year, and with changes in the product mix, revenue growth is expected to be even higher." She added, "The effect of entering new channels such as Kroger in the US and Costco in Canada and Mexico, combined with capacity expansion, is expected to further accelerate growth."

Some have expressed concerns that the Trump administration's tariff war could disrupt exports to the US, Samyang Foods' largest market. However, the securities industry believes the impact on performance will not be significant. Samyang Foods is proactively addressing the tariff issue by forming an internal task force (TF) to review various countermeasures, including diversifying export markets and reducing costs.

In this regard, Kim Jinwoo, a researcher at Eugene Investment & Securities, stated, "If the US maintains a 25% reciprocal tariff after July, annual operating profit in 2025 is expected to decrease by about 3.8% compared to a no-tariff scenario." He added, "Given the strong Buldak brand power and robust global demand, this is a manageable level."

Joo Younghoon, a researcher at NH Investment & Securities, also commented, "Samyang Foods does not have production facilities in the US, so tariff-related variables could arise. However, considering the relatively low unit price of ramen and the high loyalty of Buldak Bokkeum Myeon consumers, the impact on performance is expected to be limited."

Another factor supporting the outlook for further share price gains is that, on May 14, Samyang Foods was newly added to the Morgan Stanley Capital International (MSCI) Korea Index. The MSCI index is considered the world's most influential stock index. Securities firms estimate that, as a result of inclusion in the MSCI Standard Index, Samyang Foods could see an inflow of about 210 billion won.

However, some point out that the recent stock price surge has led to higher valuations, which could be a burden. There is also the question of whether future results will meet the market's now-elevated expectations.