[Edaily Reporter RHEE JAE-EUN ] The stock price of SamyangFoods (003230), which had fallen by about 30% from its August high, has recently rebounded. Analysts forecast that third-quarter earnings will meet market expectations despite concerns over profitability stemming from the strong won. They also expect growth to continue next year as overseas sales increase with the launch of a new factory in China.

According to the Korea Exchange on the 22nd, SamyangFoods closed at 1,254,000 won the previous day, up 2.70% from the previous trading session.

SamyangFoods’ stock price rose to 1,557,000 won during trading on August 28 but has since continued its downward trend. On the 15th, it fell as low as 1,099,000 won during trading. This represents a decline of approximately 29.4% from its high point in less than two months. Since then, the stock price has recovered some of its losses, rising to 1,289,000 won during the previous day’s trading session. This marks a 17.3% rebound from the intraday low on the 15th.

The securities industry projected that third-quarter earnings would meet market expectations, as overseas sales increased despite the strong won.

Daol Investment & Securities estimated SamyangFoods’ third-quarter revenue at 805.5 billion won and operating profit at 179.8 billion won. These figures represent increases of 27.4% and 37.4%, respectively, compared to the same period last year. In a report released on the 19th, Lee Da-yeon, an analyst at Daol Investment & Securities, predicted that the increase in overseas sales would have offset the impact of the strong won. Although cost pressures from palm oil and freight rates have increased, the firm expects the operating profit margin to reach 22.3% due to control over selling, general, and administrative (SG&A) expenses, including a reduction in advertising and promotional costs.

SamyangFoods has been expanding its sales in overseas markets led by the Buldak brand. According to SamyangFoods, cumulative sales of Buldak-branded noodle products surpassed 10 billion units at the end of May. Overseas revenue in the second quarter of this year reached 645.8 billion won, a 46.7% increase from the same period last year. Overseas revenue accounted for approximately 84% of total revenue.

The securities industry forecasts that overseas supply will increase further next year with the launch of a new factory in China. HYUNDAI MOTOR SECURITIES expects the Chinese factory, with an annual production capacity of 1.13 billion units, to begin operations early next year. Analysts note that shifting production volumes destined for China—which were previously manufactured at domestic plants—to the local factory will free up domestic production capacity to meet demand in the U.S. and Europe.

Yuanta Securities Korea also highlighted the possibility of additional price hikes. Given the growing need to adjust selling prices due to rising raw material and logistics costs, the firm believes that if further price increases materialize in major overseas markets next year, the rise in average selling prices could compound the effect of increased sales volume. Reduced logistics costs resulting from local production in China were also cited as a factor contributing to improved profitability.

HANWHA INVESTMENT & SECURITIES recommended increasing the stock’s weighting in a report titled “It’s Time to Significantly Increase Exposure Again.” The firm assumed an average capacity utilization rate of 50% for the Jiaxing plant in China next year and estimated that sales volumes in the U.S. and Europe would increase by 55.2% and 87.5%, respectively, compared to this year. It projected next year’s revenue to reach 3.9552 trillion won, a 28.1% increase from this year.

However, exchange rate pressures and the pace of the new plant’s ramp-up were cited as variables to monitor. KIWOOM Securities explained that the won’s strength is expected to continue in the fourth quarter, making it necessary to defend profitability through cost reductions. Daol Investment & Securities highlighted the pace of the Chinese plant’s capacity utilization, noting that the key to first-half earnings next year will be how quickly the company can ship additional products from its domestic plants to regions with higher selling prices following the shift to local production in China.

The target stock prices set by securities firms range from 1.75 million to 2.00 million won. Shinhan Investment set a target of 1.75 million won, HANWHA INVESTMENT & SECURITIES set 1.80 million won, and KIWOOM SECURITIES set 1.85 million won. Daol Investment & Securities and HYUNDAI MOTOR SECURITIES set 1.90 million won, while Yuanta Securities Korea set 2.00 million won.