Independent research firm Value Finder said on the 26th that S&D, a food additive manufacturer, is at the beginning stage of the popularization of Buldak sauce and predicted it will become a global steady seller. It maintained a Buy rating and set a target price of 112,000 won. S&D's previous closing price was 69,200 won.
Founded in 1998, S&D was listed on the KONEX market in 2016 and transfer-listed to the KOSDAQ market in 2021 as a food additive manufacturer.
S&D also supplies the sauce for Buldak spicy ramyeon to Samyang Foods. As demand for Buldak spicy ramyeon products has surged, S&D completed the Food Science Center Plant 2 on the 10th and is in full operation to meet supply volumes for key clients.
Value Finder projected that, in line with the trend of rising export value for Samyang Foods' Buldak products, S&D will post sales of 149.1 billion won this year and 182.1 billion won in 2026. It estimated net profit of 23.1 billion won in 2026.
Given S&D's business model, the increase in sales volume at Samyang Foods, its downstream client, is bound to translate directly into results.
Lee Chung-heon, a Value Finder analyst, said, "Until the second quarter, concerns about slower sales growth due to Samyang Foods' production capacity limits affected S&D's share price as well, but with the Milyang Plant 2 now in operation, S&D's results are expected to continue growing together."
Samyang Foods has been pushing since last year to establish a production subsidiary in China and expand its plants to meet surging Chinese demand. It had initially planned to add six production lines in Jiaxing, China, but recently disclosed a plan to add eight lines.
The analyst noted, "Once the expansion of the China plant is completed, annual production capacity will increase by 1.09 billion servings, bringing the total to 4 billion servings per year."
As exports of Buldak spicy ramyeon increase, S&D is also continuing to expand production capacity. Since Oct., S&D has been expanding its new Food Science Center Plant 2 and completed repairs at the existing plant.
The analyst explained, "With this expansion, S&D's production capacity for sauces and blended materials has increased by about 55% from before, securing capacity that can support over 200 billion won in annual sales," adding, "This expansion is highly likely to lead directly to higher sales."
It also forecast that Buldak sauce is entering the early stage of popularization and will become a global steady seller. The analyst projected, "The global craze for Buldak sauce that began with Buldak spicy ramyeon will not end as a one-time fad but will establish itself as a steady seller by penetrating the sauce market."