[Market Focus] Sunjin's Annual Earnings Equal Half of Market Cap... Undervalued at PER of 2x

Sunjin is showing strong performance. This appears to be influenced by a securities firm analysis indicating that the company's annual net profit is equivalent to half of its market capitalization, suggesting it is significantly undervalued.

As of 1:52 p.m. on July 17, Sunjin was trading at 14,810 won, up 1,810 won (13.84%) from the previous trading day.

Eugene Investment & Securities projected that Sunjin's sales and operating profit for this year will reach 1.8 trillion won and 159.5 billion won, respectively. These figures represent increases of 6.3% and 28.6% compared to the previous year.

Heo Junseo, a researcher at Eugene Investment & Securities, stated, "The reason profit growth is outpacing sales growth is that the price of grains, which are the raw materials for compound feed, is declining." He added, "At the end of the second quarter this year, the exchange rate had dropped by 6.7% compared to the end of the first quarter. This has led to improved margins in the core business, and the issue of weakened profit strength in non-operating segments is also expected to be resolved."

He further emphasized, "We forecast a net profit of 158 billion won for this year, which means the company is currently undervalued to the extent that it earns half its market capitalization in a single year."

Researcher Heo stressed that Sunjin remains undervalued despite the sharp rise in its stock price. He said, "Sunjin's current share price is at a price-to-earnings ratio (PER) of about 2 times based on projected 2025 annual results. Even after more than doubling since the first quarter earnings announcement, the positive business outlook and the scale of net profit, which has not been compromised, are still not fully reflected in the share price."

He added, "The expected increase in net profit, combined with revisions to the Commercial Act and the expansion of shareholder capitalism, could lead to increased dividends. Since Sunjin's largest shareholder is Harim Holdings, which owns a 50% stake, the expansion of dividends in line with increased profits aligns with the interests of the holding company as the largest shareholder."