Kyobo Securities projected on 4th that Samyang Foods will begin full-scale operations at its second factory in Miryang starting in the second half of the year, entering a rapid growth trajectory. The company maintained its investment opinion of 'buy' and raised its target price from 1.33 million won to 1.57 million won, an 18% increase. Samyang Foods' closing price from the previous trading day was 1.33 million won.
Kyobo Securities estimated Samyang Foods' consolidated revenue and operating profit for the second quarter at 540 billion won and 123.1 billion won, respectively. The operating profit margin (OPM) is 23%, a slight decrease from the previous quarter, but it explained that growth will resume sharply as operations at the second factory in Miryang begin in July.
Kwon Woo-jung, a researcher at KB Securities, said, "Overseas revenue is estimated to be 440 billion won, and U.S. sales are expected to increase by 3% compared to the previous quarter, while local demand in the U.S. remains strong."
The Walmart channel has a positive inventory turnover rate for Samyang Foods while competitors are struggling. Kwon noted, "Currently, the Costco entry rate is in the 50% range, and with the start of operations at the second factory in Miryang in the second half of the year, the entry rate is forecast to increase." He projected that contributions to sales from Costco will also rise in the second half of the year.
In China, it is anticipated that once the second factory in Miryang begins full-scale operations, regional expansion and vendor collaboration will strengthen due to a shortage of supply.
Kwon noted, "Europe is perceived to be stable, focusing on the UK, Italy, and France, while Southeast Asia is also showing a gradual upward trend in monthly averages, which is positive."
Meanwhile, the second factory in Miryang has been undergoing trial operation since June, and the target utilization rate for the third quarter is assessed to be around 20%.