Amid the popularity of "fire chicken noodles," Samyang Foods' stock price has reached a new all-time high, prompting securities firms to raise their target prices. This expectation is supported by forecasts of a sharp increase in profits, but the key question is whether performance can meet market expectations after the new factory begins operations as planned in the second half of the year.
Samyang Foods' stock was trading at around 1.14 million won on the morning of the 19th, down approximately 3% from the previous trading day. Since the stock price had risen significantly on the 16th, it seems profit realization has led to some selling. On the 16th, Samyang Foods' stock price jumped to 1.233 million won, setting a new all-time high. The closing price also reflected a profit increase of 19.07% (189,000 won).
Securities firms believe that Samyang Foods' stock price could rise further. According to financial information provider FnGuide, securities firms have set an average target price of 1.32 million won for Samyang Foods, raising it by 21.1% (230,000 won) from the previous target price of 1.09 million won.
The context for the market's rising expectations for Samyang Foods stems from strong expectations for improved performance. Earlier this year, the annual operating profit forecast for Samyang Foods was about 400 billion won. Now, that forecast has increased to 538 billion won. The estimated operating profit for Samyang Foods in the first quarter (January-March) was initially 90.4 billion won; however, the actual operating profit was reported at 134 billion won, leading to successive upward revisions of the forecasts.
Securities firms have also raised their forecasts for Samyang Foods' annual operating profit for 2026 from an initial estimate of 490 billion won to 669 billion won. Typically, target prices are based on expected profits over the next 12 months, so if profit forecasts increase, target prices rise accordingly.
Hanwha Investment & Securities, which provided the highest target price of 1.7 million won for Samyang Foods, projected the company's operating profit for this year at 598 billion won and 6.79 billion won for 2026. Kyobo Securities most optimistically estimated Samyang Foods' operating profit at 631 billion won for this year and 823 billion won for 2026.
There are two major reasons behind securities firms raising their performance forecasts for Samyang Foods. First, the core product, fire chicken noodles, has broadened its distribution channels by entering Kroger after Walmart and Costco in the United States. Sales points have also expanded in countries like Canada, Mexico, France, Italy, and China. In overseas markets, fire chicken noodles are sold at much higher prices than domestically, meaning that profitability improves as overseas sales increase.
Additionally, Samyang Foods will commence commercial operations at its second factory in Miryang from July. The company will begin trial production next month, with most securities firms expecting that the ramp-up speed will be faster than that of the first factory in Miryang. The annual production capacity (CAPA) of Samyang Foods will increase by about 36% (690 million pieces), from 1.94 billion pieces to 2.63 billion pieces when the second factory is fully operational.
The expansion of supply capacity in response to growing global demand is likely to further improve performance.
However, with market expectations rising, it is a challenge for Samyang Foods to demonstrate the effects of expanding distribution channels and capacity in their actual performance. Ryu Eun-ae, a researcher at KB Securities, noted, "Starting in the third quarter of this year, by expanding supply primarily in strategic countries like the United States, we should see growth in both scale and profit margin."
In particular, Samyang Foods is relatively overvalued compared to other companies in the same industry. The price-to-earnings ratio (PER) in the food sector is currently about 13.4 times. Securities firms apply a PER of 21.8 times based on this year's annual profit forecast and 17.5 times based on the profit forecast for 2026.