Korea Investment & Securities on the 2nd said that although November ramyeon export data was weak for Samyang Foods, whose share price fell more than 6% the previous day, the company's fourth-quarter results will grow. It maintained a Buy rating and a target price of 2 million won, recommending it as the top pick in the food and beverage sector. Samyang Foods' previous closing price was 1,346,000 won.
The preliminary figure for ramyeon exports in November this year was $126.48 million. That was up 7.6% from a year earlier but down 2.9% from the previous month. Based on the cumulative total for January–October this year, Samyang Foods is estimated to account for 66.1% of export value for Korean ramyeon.
Kang Eun-ji, an analyst at Korea Investment & Securities, said, "Considering the number of business days in October, which included the Chuseok holiday, the preliminary figure is somewhat disappointing," adding that as a result, "Samyang Foods' share price fell 6.9%." October had 18 business days and November had 20.
While volatility in ramyeon export data has increased, Samyang Foods' fourth-quarter results this year are expected to continue to grow. Korea Investment & Securities projected fourth-quarter revenue of 679.9 billion won and operating profit of 149.7 billion won for Samyang Foods. Those figures are up 42% and 70.7%, respectively, from a year earlier.
Kang said profitability will improve as the effect of U.S. price hikes is reflected and tariff burdens are offset through it, adding, "China is also a country with higher profitability than the consolidation operating margin, so we do not see the increase in China's export share as a risk factor."
She also said demand remains solid. Kang said, "The third-quarter results also confirmed a decrease in Buldak spicy ramyeon inventories," adding, "Most of the volumes to meet demand for China's Lunar New Year season are expected to be exported in December, and from January, when Lunar New Year preparations wrap up, exports to the United States will increase."