Hanwha Investment & Securities on the 3rd said Samyang Foods could pursue additional capacity expansion, projecting a high possibility of supply shortages after 2028. It kept its target price at 1.8 million won and its "buy" rating. Samyang Foods' closing price in the previous session was 1,332,000 won.
From the 21st to the 30th of last month, the preliminary figure for ramen exports came to $40.38 million, down 36% from the previous month. Showing weaker numbers than the previous month, Samyang Foods' share price fell nearly 10% intraday on the 1st of this month.
Han Yu-jeong, an analyst at Hanwha Investment & Securities, said, "Preliminary export figures in 10-day increments show high volatility depending on market conditions," and noted, "The previous month's figure was high due to the early-October Golden Week, and we should factor in the Singles' Day effect in China in November, which boosted exports."
Hanwha Investment & Securities analyzed that Samyang Foods' actual exports show a solid uptrend. Among major U.S. channels, the average penetration rate in cities below the 90% tier is identified as under 30%. Through collaboration with global food-and-beverage franchise companies, the Buldak brand's awareness is expected to rise, and the contribution from sauces to results is set to ramp up.
The analyst said, "Next year is when the effect of operating the second Miryang plant will be reflected," adding, "Samyang Foods' expected production capacity (CAPA) for next year is 2.9 trillion won on a value basis, and if existing production lines are replaced, it could expand to 3.2 trillion won."
The analyst said concerns about Samyang Foods' short-term results are excessive and there is considerable room for upward revisions in the mid to long term. The analyst noted, "The new plant in China, to be completed in Jan. 2027, is likely to face supply shortages after 2028, and the plant in Korea could also face supply shortages starting in 2029," adding, "This is grounds to view the recent disposal of treasury shares as securing funds for additional capacity expansion."