Daishin Securities assessed that Samyang Foods fell short of expectations in 1Q due to sluggish domestic demand, despite excellent exports.
The securities firm maintained a 'Buy' rating on Samyang Foods and lowered the target price to 120,000 won, 14% lower than 140,000 won.
"In the first quarter of this year, the local ramen market fell 16 percent year-on-year to 528.2 billion won, down 5% from the first quarter of 2019," the securities firm said.
On a consolidated basis in the first quarter, Samyang Food's sales and operating profit fell 11% year-on-year to 140 billion won and 46% to 14.4 billion won, respectively. This is below Daishin Securities' estimated operating profit of 21.9 billion won and consensus operating profit of 19.9 billion won.
"Samyang Food's market share of instant noodles based on amount fell 1.1% year-on-year to 10.7%," the securities firm said. "Domestic snack sales were remained same as the previous year's level, but domestic noodle sales fell 23% due to a drop in instant noodle sales with a market share drop."
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
