Samyang Foods’ stock rally — shooting past the 1 million won ($700) mark to climb above 1.6 million won per share — seems to have fizzled for now, down more than 20 percent this month even as the benchmark Kospi marches to fresh highs.
Shares of the instant noodle maker opened at 1,263,000 won on Monday, down about 2 percent from the previous session and nearly 24 percent below its all-time intraday high of 1,665,000 won, reached just over a month ago. The stock ended the session at 1,260,000 won.
On the same day, the Kospi climbed past the 4,000 level for the first time, just one trading day after clearing 3,900, fueled by solid foreign inflows and improving investor sentiment.
Samyang's sharp pullback appears indicative of growing investor concerns over potential earnings headwinds in the third and fourth quarters, as US tariffs, set at 15 percent beginning in August, could begin to weigh on margins.
“Third-quarter earnings are unlikely to meet market expectations, while the outlook for the fourth quarter remains uncertain,” said Han Yoo-jung, a researcher at Hanwha Investment & Securities. “It’s a moment for the market to reassess its earlier optimism.”
According to the investment firm, Samyang Foods is projected to post third-quarter operating profit of 125.2 billion won, up 43.4 percent on-year, though still below the market consensus of 135.6 billion won.
The firm also expects weaker exports due to reduced output at Samyang’s Wonju and Iksan plants, with export revenue estimated at 357.8 billion won, below the earlier forecast of 417.9 billion won.
Despite near-term volatility, however, many analysts argue that the long-term investment case remains intact, as the weakness does not stem from falling demand or deteriorating fundamentals.
“Short-term earnings may face some pressure,” Han said, “but the company’s strong brand and solid global presence continue to support its long-term investment case.”
Kim Jung-wook, a researcher at Meritz Securities, maintained a positive outlook on fourth-quarter earnings, citing continued growth in overseas subsidiaries and more efficient marketing spend.
“Tariff mitigation efforts and improved operations at Samyang’s second Miryang plant could support fourth-quarter performance,” Kim said.
minmin@heraldcorp.com
