Samyang Foods posts record operating profit on Buldak popularity; maintains 1.85 million won target price

[Financial News] Korea Investment & Securities maintained its Buy rating and target price of 1.85 million won for Samyang Foods, saying the company would continue to grow as global sales of Buldak Ramen expand despite the stronger won.
Choi Go-un, an analyst at Korea Investment & Securities, said in a report on the 12th, “Third-quarter results met market expectations.” Choi added, “Even excluding tariff refunds, the company maintained operating profit in the 170-billion-won range, showing that the core story is growth in the Buldak brand.”
Samyang Foods posted revenue of 791.8 billion won in the third quarter, up 25% from a year earlier and 3% from the previous quarter. Operating profit reached 196.2 billion won, rising 50% and 11%, respectively, and setting a quarterly record.
The operating profit figure included a 20-billion-won refund of U.S. tariffs. Including the refund, it was 6% above market expectations, but excluding the one-off gain, it was 4% below them. The company partly offset the negative impact of the stronger won by cutting selling, general and administrative expenses, including marketing costs.
Overseas sales rose 29% year on year to 660.8 billion won. By region, sales increased 37% to 212.5 billion won in the United States, 13% to 208.9 billion won in China, and 87% to 99.5 billion won in Europe. Domestic sales also rose 8% to 131.1 billion won.
In the United States, sales per store at major retail chains increased, while sales in Mexico also expanded. In Europe, the company missed some sales opportunities as it reorganized its partners in key countries, but maintained a high growth rate.
The analyst expected an unavoidable quarter-on-quarter decline in operating profit in the fourth quarter as the impact of the stronger won grows. However, with Samyang Foods still at an early stage of global market penetration, the analyst saw overseas production capacity and distribution network expansion—not exchange rates—as the factors that would determine medium- to long-term performance.
Choi said, “With the Jiaxing plant in China set to begin operations early next year, key tasks include getting initial operations on a stable footing, expanding exports to Europe, and securing new distribution channels in the United States.” Choi added, “The current earnings outlook does not yet reflect the possibility of price increases overseas.”
The analyst also cited the possibility of further investment in overseas production facilities as a potential driver of share-price gains. The analyst expected that, the Chinese plant's opening would increase the export capacity of domestic production facilities, accelerating growth in overseas markets, including Europe.
Choi said, “Since Buldak products remain popular, the focus should be on potential growth drivers.” Choi added, “The projected P/E for 2027 is 13x, lower than that of Japanese ramen companies, which limits the potential for further share-price declines.”

[email protected] Lee Jeong-hwa Reporter