[E-Daily Kim Hyung-il Reporter] Yuanta Securities Korea assessed that SamyangFoods(003230)is maintaining solid profitability as its gross profit margin improves amid continued strong growth in overseas sales. The firm maintained its “Buy (BUY)” investment rating and target price of 2 million won.

On the 18th, Son Hyun-jung, an analyst at Yuanta Securities Korea, stated, “SamyangFoods’ second-quarter consolidated revenue was 770.3 billion won, and operating profit was 176.2 billion won, in line with expectations,” adding, “Overseas revenue totaled 645.8 billion won, while domestic revenue was 124.5 billion won, indicating continued high growth driven by overseas markets.”

Revenue by overseas subsidiary was 203.6 billion won in the U.S., 181.0 billion won in China, 80.5 billion won in Europe, and 32.5 billion won in the U.K. Growth drivers included the acquisition of new clients and expansion into mainstream and ethnic channels in the U.S., as well as the expansion of distribution networks in Europe and the U.K.

Researcher Son explained, “The most positive aspect of these results is that the gross profit margin improved by 5.7 percentage points from the first quarter to 48.1 percent,” adding, “This reflects a decline in the unit cost of flour, an increased sales share from regions with high average selling prices (ASP) such as the U.S., Europe, and the U.K., and favorable exchange rate effects.”

He continued, “The fact that the cost ratio improved even as overseas sales grew rapidly confirms our cost control capabilities and the positive impact of an improved regional mix.”

The firm projected that third-quarter consolidated revenue would reach 828.6 billion won and operating profit 190.6 billion won, representing year-over-year increases of 31.1% and 45.6%, respectively. Overseas revenue was forecast at 701.9 billion won. Growth in China is expected to continue, driven by Mid-Autumn Festival demand and inventory normalization, while sales in the U.S. are projected to expand further based on inventory secured in the second quarter.

Analyst Son said, “The gross profit margin, which rose to 48.1% in the second quarter, is expected to normalize slightly in the third quarter due to a slowdown in exchange rate effects and some increases in raw material input prices,” adding, “We expect operating profit to increase quarter-over-quarter as this is offset by higher sales volumes and growth in overseas markets with high average selling prices (ASP).”

Consolidated revenue for 2026 is projected to reach 3.1489 trillion won, and operating profit is expected to reach 727 billion won, representing year-over-year increases of 33.9% and 38.7%, respectively. The operating profit margin is forecast to be 23.1%.

Analyst Son added, “While strong growth in the U.S. and Europe continues, China is emerging as an additional growth driver, and supply capacity is expected to expand starting in 2027 with the launch of the Jiaxing plant in China,” noting, “Since the company is maintaining industry-leading profitability while expanding investments for growth, a premium valuation relative to competitors is fully justified.”