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[Alpha Biz= Paul Lee] Yuanta Securities stated on Thursday that S&D is expected to see a sharp improvement in earnings alongside the global expansion of the "Buldak" brand. However, the brokerage did not provide a target price or investment rating for the company. S&D is the exclusive supplier of key ingredients for Samyang Foods' Buldak sauce.
Yuanta Securities noted, "The global expansion of the Buldak brand is positioning S&D as a key beneficiary in the sauce market, beyond being a simple raw material supplier. The growing global sales of Samyang Foods' Buldak series are directly contributing to S&D’s improved performance."
S&D’s main products include key ingredients for Buldak liquid and powder sauces, which account for 90% of its total sales. Last year, the company achieved record-breaking revenue of KRW 116.1 billion and an operating profit of KRW 20.1 billion, marking year-on-year increases of 31.6% and 56.1%, respectively. The 40% growth in Buldak sauce ingredient sales, coupled with reduced raw material and production costs, significantly contributed to this strong performance.
To meet rising demand, S&D plans to invest KRW 16 billion by June to expand its production capacity by 27%. The primary driver behind this expansion is the surging demand for Buldak sauce. Analyst Son remarked, "This is not merely a production increase but a crucial investment aligned with Samyang Foods’ global expansion strategy. By next year, the utilization rate is expected to rise to 70%."
Notably, Samyang Foods is actively developing Buldak sauce as an independent global hot sauce brand, moving beyond its initial use as an instant noodle sauce. Analyst Son emphasized, "S&D’s role has evolved from a simple raw material supplier to a key strategic partner."
Regarding global expansion, the brand is steadily broadening its reach, particularly in the U.S., China, and Southeast Asia. Samyang Foods also plans to establish a production facility in China by 2027, further strengthening its international presence.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
