Samyang Foods shares hit upper price limit

[Photo by Yonhap]

South Korea’s Samyang Foods Co. saw its shares soar to the upper price limit at the opening bell on Friday, driven by its stellar performance in the first quarter of 2024 that far exceeded market expectations.

Samyang Foods shares traded at 446,500 won ($329.83) as of 9:12 a.m. on Friday, up 103,000 won, or 29.99 percent, from the previous trading day and hitting a new 52-week high. The surge in buying interest triggered a volatility interruption (VI) right after the market opened.

The stock had been on an upward trend for the past five trading days, and the influx of funds was attributed to the company‘s first-quarter earnings announcement the previous day, which confirmed its rapid growth.

Samyang Foods reported consolidated sales of 385.7 billion won and an operating profit of 80.1 billion won for the first quarter of the year, which was almost double the market consensus operating profit of 42.4 billion won.

The company’s overseas sales in particular grew 85 percent year-on-year to hit 286 billion won for the quarter, driven by the popularity of ’Carbo Buldak’ Super-Hot Spicy Noodle on overseas social media platforms.

Hanwha Investment & Securities Co. analyst Han Yu-jeong described Samyang Foods‘ performance as “an extraordinary surprise in the food and beverage sector,” noting that the expansion of large client entries by the company’s U.S. subsidiary and the sales expansion by its Chinese subsidiary contributed to the results.

Han raised the target price for Samyang Foods from 300,000 won to 600,000 won, saying that “the stock is already at a historic high, but remains undervalued given the steep upward revisions in performance forecasts.” Daishin Securities Co. also raised its target price from 320,000 won to 500,000 won, and IBK Investment & Securities Co. from 290,000 won to 460,000 won.

On the other end of the spectrum, HLB Co. shares plummeted to the lower price limit in early trading on Friday after news that its targeted anti-cancer drug ‘Rivoceranib’ failed to obtain the U.S. Food and Drug Administration (FDA)’s new drug approval to teat liver cancer.

Shares in HLB traded at 67,100 won as of 9:05 a.m., down 28,700 won, or 29.96 percent, from the previous day. Other HLB group stocks, including HLB Life Science Co., HLB Therapeutics Co., HLB bioStep Co., and HLB Pharmaceutical Co., also hit the lower price limit.

HLB‘s market capitalization ranking, which had been as high as second on the Kosdaq market the previous day, also dropped to fourth place.

In a separate development, HD Hyundai Heavy Industries Co. also saw its stock price drop after its holding company, HD Korea Shipbuilding & Offshore Engineering Co. (HD KSOE), announced plans to dispose of its shares in HD Hyundai Heavy Industries.

The stock traded at 131,300 won as of 9:22 a.m., down 6.55 percent from the previous trading day.

HD KSOE announced after the previous day’s market close that it would dispose of 2,663,193 shares in HD Hyundai Heavy Industries via a block deal before the market opened. Following the sale, HD KSOE’s stake in the company will decrease to 75.02 percent from 78.02 percent as of the end of March 2024. HD KSOE said it aims to increase liquidity and trading activity in HD Hyundai Heavy Industries shares with the disposal.