Korea Investment & Securities projected that Samyang Foods would continue to see sales growth based on the expanded production capacity at its Miryang Plant No. 2. It maintained a 'buy' rating and raised its target price from 1.43 million won to 1.8 million won, up 25.9%. The closing price of Samyang Foods on the previous trading day was 1.436 million won.

A display of spicy chicken ramen at a large supermarket in Seoul./ Courtesy of Yonhap News Agency

Kang Eun-ji, a researcher at Korea Investment & Securities, noted, "The hot chicken flavor ramen produced at Miryang Plant No. 2 will be exported to the U.S. and Europe starting in the third quarter (July-September) and will lead earnings growth." He added, "Especially, considering that sales growth was limited due to supply shortages in certain channels in the U.S. and Europe during the first quarter (January-March), rapid growth is expected." Miryang Plant No. 2 completed construction last month and began full-scale operations this month.

Kang's assessment is that the rate of market share increase in the U.S. ramen market will also be rapid. He said, "Compared to the period of significant growth expectations for Nongshim from 2014 to 2016, Samyang Foods possesses even stronger re-rating factors for its earnings growth from 2024 to 2026."

Analysis shows that while Nongshim's average operating profit margin from 2014 to 2016 was only 4.3%, Samyang Foods' average operating profit margin for 2024 to 2026 is projected to be 22.8%, more than five times higher.

Korea Investment & Securities estimated that Samyang Foods will record sales of 538.9 billion won and operating profit of 130.6 billion won in the second quarter (April-June) of this year, representing increases of 27% and 46%, respectively, compared to the same period last year.

Kang Eun-ji, a researcher at Korea Investment & Securities, stated, "Samyang Foods' estimated average monthly ramen export amount for April and May was $87.5 million," adding, "Although the average won-to-dollar exchange rate for the second quarter was down slightly to 1,404 won compared to the previous quarter, increased export volume will also lead to a rise in sales."