On the 16th, IBK Securities adjusted the target price for Samyang Foods(003230) from 240,000 won to 290,000 won, expecting continued strong growth in exports. The investment rating remains 'BUY'.
Kim Taehyun, an analyst at IBK Securities, stated, "With an upward revision of estimated earnings per share(EPS) for 2024~2025, the target price has been adjusted upward by 21% compared to the previous estimate." He explained, "As the high export growth continues, there is valid anticipation for further demand expansion due to product diversification."
It is expected that Samyang Foods' operating profit for the first quarter of this year will exceed market expectations. Kim estimated, "Based on consolidated figures for the first quarter, sales are estimated to increase by 27% year-on-year to 311.9 billion won, and operating profit is estimated to increase by 80.4% to 43 billion won. Although sales are expected to slightly undershoot the consensus of 325.59 billion won in sales and 37.1 billion won in operating profit due to sluggish domestic sales, operating profit is anticipated to significantly surpass expectations due to lower input costs for wheat, starch, palm oil, and the rise in the USD/KRW exchange rate."
Sales from noodles and snacks are expected to increase by 27.4% to 297.5 billion won. Kim noted, "With a 30.1% improvement in total exports of domestic instant noodles in the first quarter, it is estimated that Samyang Foods' export revenue also increased by 42.6%." He added, "Especially in the case of exports to China, logistics, which were suspended due to the Chinese New Year in February, resumed in March and saw the most significant increase, with demand expanding in the United States, Southeast Asia, and Europe."
Domestic sales are estimated to decrease by 2.6%. Kim analyzed, "This is interpreted as a result of choosing to produce and focus more on higher-margin export products as there is limited additional production capacity available, while the influence of subdued consumer sentiment is also acknowledged.” He further commented, "Moreover, it is estimated that domestic profitability would have been better due to reduced freight subsidies and price discounts."
Diversification of the export product portfolio is considered a factor that enhances mid to long-term growth potential. Kim concluded, "Although the proportion of original Buldak Ramen among export products exceeded 50% until 2022, it has been decreasing to around 40% last year." He added, "The diversification of the export product portfolio, such as products like Carbonara Buldak, is positive in terms of growth potential and sustainability in overseas markets."
*[KOSPI]Samyang Foods(003230), known for its iconic ramen brand "Samyang Ramen," manufactures and sells various products including noodles, snacks, and dairy products. Representative products include Buldak Spicy Chicken Ramen, Nagasaki Jjamppong, and Jjanggu. The market capitalization is 1.8268 trillion won (as of April 15, 2024, closing price).
On the 16th, IBK Securities adjusted the target price for Samyang Foods(003230) from 240,000 won to 290,000 won, expecting continued strong growth in exports. The investment rating remains 'BUY'.
Kim Taehyun, an analyst at IBK Securities, stated, "With an upward revision of estimated earnings per share(EPS) for 2024~2025, the target price has been adjusted upward by 21% compared to the previous estimate." He explained, "As the high export growth continues, there is valid anticipation for further demand expansion due to product diversification."
It is expected that Samyang Foods' operating profit for the first quarter of this year will exceed market expectations. Kim estimated, "Based on consolidated figures for the first quarter, sales are estimated to increase by 27% year-on-year to 311.9 billion won, and operating profit is estimated to increase by 80.4% to 43 billion won. Although sales are expected to slightly undershoot the consensus of 325.59 billion won in sales and 37.1 billion won in operating profit due to sluggish domestic sales, operating profit is anticipated to significantly surpass expectations due to lower input costs for wheat, starch, palm oil, and the rise in the USD/KRW exchange rate."
Sales from noodles and snacks are expected to increase by 27.4% to 297.5 billion won. Kim noted, "With a 30.1% improvement in total exports of domestic instant noodles in the first quarter, it is estimated that Samyang Foods' export revenue also increased by 42.6%." He added, "Especially in the case of exports to China, logistics, which were suspended due to the Chinese New Year in February, resumed in March and saw the most significant increase, with demand expanding in the United States, Southeast Asia, and Europe."
Domestic sales are estimated to decrease by 2.6%. Kim analyzed, "This is interpreted as a result of choosing to produce and focus more on higher-margin export products as there is limited additional production capacity available, while the influence of subdued consumer sentiment is also acknowledged.” He further commented, "Moreover, it is estimated that domestic profitability would have been better due to reduced freight subsidies and price discounts."
Diversification of the export product portfolio is considered a factor that enhances mid to long-term growth potential. Kim concluded, "Although the proportion of original Buldak Ramen among export products exceeded 50% until 2022, it has been decreasing to around 40% last year." He added, "The diversification of the export product portfolio, such as products like Carbonara Buldak, is positive in terms of growth potential and sustainability in overseas markets."
*[KOSPI]Samyang Foods(003230), known for its iconic ramen brand "Samyang Ramen," manufactures and sells various products including noodles, snacks, and dairy products. Representative products include Buldak Spicy Chicken Ramen, Nagasaki Jjamppong, and Jjanggu. The market capitalization is 1.8268 trillion won (as of April 15, 2024, closing price).