[Edaily Reporter Park Jung-Soo ] On the 6th, KB Securities maintained its “Buy” investment rating and target price of 1.95 million won for SamyangFoods(003230), stating that the company’s earnings resilience is expected to rise to the next level next year with the start of operations at its Chinese plant, amid continued robust growth in the U.S. and Chinese markets.
Ryu Eun-ae, an analyst at KB Securities, stated, “Second-quarter earnings are expected to meet market expectations thanks to robust growth in major countries amid a favorable exchange rate environment,” adding, “Anticipation for the start of operations at the Chinese factory in 2027 is also growing.”
KB Securities estimated SamyangFoods’ second-quarter revenue at 763.1 billion won, a 38.0% increase year-over-year, and operating profit at 178.9 billion won, up 48.9%. These figures are in line with the market consensus for operating profit.
The firm projected that growth at the U.S. and China subsidiaries would drive these results. Analyst Ryu explained, “The U.S. subsidiary saw sales increase, driven primarily by new distribution channels such as Target and Kroger, amid favorable exchange rates, while the Chinese subsidiary is expected to post a growth rate similar to the previous quarter, thanks to the strong yuan and stable inventory management.” He added, “In Europe as well, there was no substantial impact on sales due to the Glycidol issue, and expansion into new regions is continuing.”
However, the company forecast that the gross profit margin would decline slightly compared to the previous quarter due to an increase in unsold inventory on board and rising fuel costs. The operating profit margin is also expected to decrease compared to the previous quarter due to increased marketing expenses for “Carbo Mac & Cheese” and World Cup-related marketing in North and Central America.
KB Securities assessed that the Chinese factory, scheduled to begin operations in January of next year, will be a key driver of mid- to long-term growth. Analyst Ryu said, “Since the company has only entered some first- and second-tier cities in China so far, market penetration is low, but demand is high, so the factory’s utilization rate is expected to rise rapidly,” adding, “Depreciation expenses are projected to be in the low 10 billion won range annually.”
He continued, “The current projected price-to-earnings (P/E) ratio for 2026 stands at around 15 times, which is lower than the global competitor average of 17 times,” adding, “Considering the solid second-quarter earnings and the planned launch of the China plant in 2027, the valuation is attractive, and we recommend it as a buying opportunity.”