Food stocks, including Samyang Food (003230.KS), rallied together during intraday trading. Analysts attribute the gains to bargain buying, as expectations for earnings improvement continue, centered on companies with high overseas sales.
According to the Korea Exchange, Samyang Food was trading at 1,221,000 won as of 2:48 p.m. Friday, up 123,000 won, or 11.20%, from the previous session. The stock opened weak in early trading but expanded its gains as buying interest picked up. It rose as high as 1,220,000 won at one point, recovering to the 1.2 million won range.
Other food stocks also climbed. Daehan Sugar (001790.KS) was trading at 2,610 won, up 8.30%, while S&D (260970.KQ) rose 5.99% to 50,400 won. Hansung Enterprise (003680.KS) and Crown Haitai Holdings (005740.KS) preferred shares gained 4.42% and 4.38%, respectively. Nongshim (004370.KS) was up 3.55% at 365,000 won, and Dongwon Industries (006040.KS) rose 3.08% to 35,100 won.
The food sector has seen continued expectations for earnings improvement recently, centered on companies with high overseas sales. As K-food recognition rises in North American, European, and Southeast Asian markets, exports of ramen, snacks, ready-to-eat meals, and sauces are steadily increasing. Investor sentiment is also improving as the sector's defensive character, being relatively less affected by economic fluctuations, draws attention.
Companies with export competitiveness are leading the rally. Samyang Food reflects expectations that it will continue its growth momentum in overseas markets, centered on its Buldak brand. The recent price correction from its peak, which has lowered valuation pressure, is also cited as a factor behind the buying interest. KB Securities estimated Samyang Food's second-quarter revenue at 763.1 billion won and operating profit at 178.9 billion won. These figures represent increases of 38.0% and 48.9%, respectively, from the same period last year. It projected that growth in key overseas markets would continue, with sales from its U.S. and Chinese subsidiaries rising 12.3% and 13.2% quarter-on-quarter, respectively.
Stable raw material prices and a favorable exchange rate are also raising expectations for profitability. "While some companies face the burden of increased marketing costs related to the North and Central American World Cup, the strength of the dollar and the yuan could partially offset this," an official in the financial investment industry said.
