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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] IBK Investment & Securities raised its earnings forecast for Samyang Foods on the 21st, maintaining a "Buy" rating with a target price of 720,000 KRW.
IBK stated, "We expect consolidated sales for Q3 to reach 447.3 billion KRW, up 33.4% year-on-year, while operating profit is projected to increase by 87.5% to 81.4 billion KRW." They noted that this represents a 7% increase in sales and a 1% rise in operating profit compared to their previous estimates (416.9 billion KRW / 80.5 billion KRW).
The firm explained that the modest increase in operating profit relative to sales is due to additional expenses related to labor costs for increasing production capacity. They added that despite rising sales expenses and transportation costs, significant profit improvement is expected due to the leverage effect from export growth and declining costs.
IBK Investment & Securities anticipates strong export growth to the U.S. They expect that focusing on exports to the U.S. and Europe will result in relatively lower growth rates in exports to China and Southeast Asia.
They also highlighted, "As the share of U.S. sales increases, it is positive for overall margin improvement," and predicted that exports to China would show double-digit growth in Q4, reflecting the impact of the Singles' Day (November 11) event.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
