Buldak maker becomes hot stock on production expansion, global popularity

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Buldak maker becomes hot stock on production expansion, global popularity

Published: 07 Jun. 2024, 13:55 Updated: 07 Jun. 2024, 16:30

KIM JU-YEON
kim.juyeon2@joongang.co.kr

A shopper picks up a packet of Buldak Ramen at a supermarket in Seoul. [NEWS1]

Shares of Samyang Foods, known for its spicy Buldak Ramen, shot up after the food manufacturer announced an expansion of production lines for the popular instant noodle.

Samyang Foods shares ended at 603,000 won ($441) on Friday, up 22,000 won, or 3.79 percent, from the previous trading session. Shares had reached a new intraday trading high of 635,000 won on the same day as markets opened.

The company said Wednesday that it will install six production lines — one more than initially planned — at its second Miryang factory in South Gyeongsang. Construction expenses also increased from 164.3 billion won ($120.3 million) to 183.8 billion won. Samyang broke ground on the factory in March this year and is set to finish by January 2025.

With the added production line, the factory’s ramyeon production increased from 560 million units to 690 million units a year. After the factory starts operations, Samyang Foods’ total annual ramyeon production from its factories in Wonju, Iksan and Miryang will reach 2.5 billion units.

Hanwha Investment & Securities raised its earnings forecast for Samyang Foods in line with the expanded supply, bumping up the company’s target stock price from 710,000 won to 800,000 won on Friday.

Samyang Foods’ operating profit for next year is estimated at 404.9 billion won, up from this year’s 381.8 billion won, according to Hanwha analysts.

Last month, Samyang Foods beat rival Nongshim, known for its Shin Ramyun and Chapagetti brands, in Korea’s instant noodle market share for the first time in almost 25 years. The Buldak Ramen manufacturer is set to reach 1.4 trillion won in sales this year on the back of increased overseas revenue from its flagship Buldak Ramen and related products.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]