Samyang Foods is up more than 7% in early trading. With record first-quarter results and brokerages raising their target prices across the board, buyers are piling in.
As of 9:20 a.m., Samyang Foods was trading at 1,386,000 won on the Korea Exchange, up 91,000 won (7.03%) from the previous session.
Samyang Foods said the previous day that on a consolidation basis in the first quarter it logged revenue of 714.4 billion won and operating profit of 177.1 billion won. Revenue rose 35% and operating profit 32% from a year earlier, both all-time quarterly highs. Both revenue and operating profit far exceeded the consensus (revenue 674.6 billion won; operating profit 163.8 billion won). The operating profit margin (OPM) was 24.8%.
LS Securities raised its target price for Samyang Foods to 1.8 million won from 1.75 million won.
Park Seong-ho, an analyst at LS Securities, said, "In the second quarter as well, strong exports to the United States and China are continuing, so we judge that steep revenue growth will continue," adding, "There are concerns that logistics costs and packaging material costs could rise due to the Middle East situation, and high advertising-like expenses are expected to be recognized, but this is at a level that can be offset by revenue growth."
He added, "Based on an overseas revenue share exceeding 80%, having strong pricing power is a compelling investment point for Samyang Foods."
Hanwha Investment & Securities also raised its target price to 2 million won from 1.9 million won.
Han Yu-jeong, an analyst at Hanwha Investment & Securities, said, "In the food and beverage sector, where a high cost ratio makes it structurally difficult to generate high margins, the fact that an operating profit margin exceeding 20% is being sustained is proof that global demand for the Buldak brand remains very strong."