Despite 1.5 Million Won "Emperor Stock" Status... Samyang Foods' "Buldak Craze" Earns Only a "D" for Shareholder Returns [K-Food G Report] ⑤

[K-Food Governance Report] Part 2
Top 20 Food and Beverage Companies by Market Cap
Analysis of Dividend Payout and Treasury Stock Policies
Samyang Foods Fails Shareholder Return Evaluation

Editor's NoteDespite the global "K-Food" boom elevating the status of Korean food companies, outdated governance structures remain prevalent. While global brand trust continues to rise, critics point out that management systems are still stuck in past practices, with insufficient efforts to restore investor confidence. In line with the implementation of the revised Commercial Act, Asia Economy evaluated the governance of the top 20 listed food companies by market capitalization. Over five installments, we will analyze the results and improvement tasks based on a quantitative and qualitative assessment of 10 items, including dividend payout ratio, treasury stock policy, dual listing structure, and board composition.

Yonhap News

Samyang Foods was found to have the weakest shareholder return policy among listed food and beverage companies in Korea. Despite leading the global K-Food craze with the "Buldak" phenomenon and its corporate value surpassing 1.5 million won per share this year-earning it "emperor stock" status-the company maintained a single-digit dividend payout ratio last year and had no plans for direct return policies such as treasury stock buybacks or cancellations.

On August 12, Asia Economy conducted a quantitative and qualitative assessment of the top 20 listed food and beverage companies by market capitalization, based on 10 governance evaluation criteria. The results showed that Samyang Foods had a dividend payout ratio of 9.1% last year. It was one of only three companies among the 20 surveyed whose payout ratio remained in the single digits. The five-year average payout ratio was also only 11.4%.

Samyang Foods has maintained consistent cash dividends for 12 consecutive years since 2013. However, the pace of dividend increases has not kept up with the growth in net profit, leading to criticism that shareholder returns are inadequate.

In fact, Samyang Foods' flagship product, "Buldak Bokkeum Myeon," continues to see explosive sales in global markets, driving record-high quarterly earnings. Last year, operating profit surged 133% year-on-year to 344.2 billion won. During the same period, net profit more than doubled from 126.5 billion won to 271.2 billion won, but total dividends paid increased by only 56%, from 15.6 billion won to 24.6 billion won.

In the first quarter of this year, Samyang Foods' sales surpassed 500 billion won, and operating profit reached a record 134 billion won, the highest quarterly result ever. The company is expected to perform well in the second quarter as well. As a result, the stock price has soared in recent years, recently exceeding 1.5 million won per share.

However, as the stock price has surged, the dividend yield (the ratio of dividends to stock price) has declined each year. The dividend yield on Samyang Foods' common stock was 1.1% in 2022, 0.9% in 2023, and 0.4% in 2024, well below the average dividend yield of 3.05% in the KOSPI market last year.

Samyang Foods also received low marks for other shareholder return policies, such as treasury stock buybacks and cancellations. From February 8 to August 8, 2022, the company acquired 74,478 treasury shares through a trust contract, valued at about 7 billion won, which accounted for only 0.99% of total shares.

Furthermore, the company has not formalized or disclosed its dividend or treasury stock policies. In March, Samyang Foods announced a plan to enhance corporate value, but while it introduced a system to determine dividend amounts first and set the record date later-improving transparency in its dividend policy-it did not disclose any direct shareholder return plans such as treasury stock policies.

As a result, Samyang Foods scored 8 out of 20 points in this governance assessment, receiving a "D" grade. In particular, it received zero points in areas such as dividend payout ratio, formalization of shareholder return policies, and acceptance of shareholder proposals.