Samyang Foods announced a surprising performance that exceeded market expectations, thanks to the popularity of its spicy chicken noodles, prompting securities firms to raise their target prices. Considering the commercial production of the Miryang plant 2 in the second half of this year, the main opinion was that the stock price could rise further.
Hanwha Investment & Securities maintained a 'buy' investment opinion on Samyang Foods on the 16th and set the target price at 1.7 million won. This is higher than the previous day's closing price of 991,000 won and the pre-market trading value of 1,146,000 won at 8:30 a.m.
Han Yoo-jung, a researcher at Hanwha Investment & Securities, noted, "It was a conviction buy, indicating strong confidence in the purchase," adding that "Samyang Foods is showing incomparable growth and profitability."
Other securities firms also raised their target prices uniformly. ▲ IBK Securities: 1.45 million won ▲ Yuanta Securities Korea: 1.31 million won ▲ Korea Investment & Securities and NH Investment & Securities: 1.3 million won ▲ KB Securities, Shinhan Investment & Securities, and LS Securities: 1.25 million won, among other target prices.
This is because the results for the first quarter of this year (January to March) announced by Samyang Foods exceeded market expectations. The consolidated sales for the first quarter of Samyang Foods were 529 billion won, and the operating profit was 134 billion won, exceeding the market estimates by 30.8 billion won and 29.5 billion won, respectively.
Kim Tae-hyun, a researcher at IBK Securities, mentioned in a report titled 'I'm sorry, I underestimated it' that "Samyang Foods continued to see strong exports to major countries such as the United States and China." In particular, the Americas region saw a growth rate of 51.8% compared to the previous year, benefiting from the shelf movement effect within Walmart and an increase in sales proportion at Costco.
Evaluations also indicate that the Miryang plant 2, which has begun preliminary production, will support future growth. The Miryang plant 2 is set to start commercial production in July, increasing Samyang Foods' production capacity by about 40%. Park Sung-ho, a researcher at LS Securities, stated, "Once the operation of the Miryang plant 2 is fully ramped up, high export growth will continue," adding that "while there will be some fixed cost burden, it can be sufficiently offset by increased sales and favorable exchange rate conditions."
Ryu Eun-ae, a researcher at KB Securities, stated, "The ramp-up speed of Miryang plant 2 is expected to be significantly faster than that of Miryang plant 1," and added that "the concerns about exchange rate declines in the second half are expected to alleviate the possibility of price increases for U.S. products."