Samyang Foods’ stocks soar on expansion of Buldak production lines

Buldak Ramen products are stocked on the shelves of  a large retail store in Seoul. Yonhap

Samyang Foods’ latest decision to further expand its production lines to increase exports of its global hit Buldak Ramen instant noodles has led the food company’s stock price on a continual rise. In the past month alone, Samyang’s stock price has nearly doubled.

According to the Korea Exchange (KRX) on Friday, the bourse operator of the Korean stock markets, the stock price of Samyang Foods finished at 603,000 won ($441), a 3.79 percent increase from the previous trading session. Friday’s rise followed the previous trading session’s 6.61 percent jump.

The company’s bullish trend has been ongoing since May over strong overseas sales of key products, such as Buldak Ramen, following successful first-quarter earnings.

In the quarter, Samyang Foods posted consolidated sales of 385.7 billion won, up 57 percent from the same period last year. Among these, overseas sales amounted to 288.9 billion won, marking an 83 percent jump year-on-year. Reflecting the first-quarter earnings, the company’s stock price nearly doubled over the past month alone.

On top of this winning streak, the company’s public disclosure on Wednesday — that it will further increase its production line by the first half of next year to meet the explosive increase in overseas demand — has led another round of upward trajectory, breaking the 600,000 won mark for the first time since the company’s founding in 1961.

Wednesday’s public disclosure announced a revision in the company’s plan for its upcoming Miryang 2 factory, expanding the initially proposed five production lines to six, in response to increasing global demand.

“Demand from the U.S. market was already increasing when we initially decided to expand the production lines. As demand from the U.S. has continued to exceed our expectations, Samyang Foods has decided to increase the production lines further,” the food company explained.

When the factory is completed, Samyang Foods’ annual maximum instant noodle production capacity is projected to increase from the 추천 current 1.8 billion to 2.5 billion. In particular, the expected annual production volume of Buldak Ramen will increase to 690 million, from previous 560 million, with the additional production capability.

Hanwha Investment & Securities adjusted its target price for Samyang Foods from the previous 710,000 won to 800,000 won.

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