The Korean investment channel has recently highlighted two companies—KT&G and Samyang Foods—as key securities for investors, focusing on the improving profitability of their domestic operations and their expanding overseas presence, which together are expected to drive higher stock prices.
In a report released on the 23rd, D.S. Investor Securities Research Institute analyst Jang Ji-hye (Han Kyoung.com) noted that the food‑ingredients industry’s earnings stability has weakened due to sluggish domestic demand and rising raw‑material costs. However, by improving profitability in its domestic business and through labour cost control and production efficiency, the sector is expected to regain attractive returns. In particular, a decline in U.S. dollar exchange rates will ease import‑price pressure.
The report also said that while capital expenditure (CAPEX) for food‑ingredient companies has plateaued over the past three years, next year’s expansion of production capacity (CAPA) would start to pay off and the U.S./European investment channel is expected to widen its reach. Based on this growth momentum, KT&G is being evaluated as a highly attractive investment target from a defensive‑investment perspective, having expanded its share‑holding, dividend and stock‑buyback programmes.
Samyang Foods, with its strong overseas presence and steady production capacity expansion, is judged to have strengthened its earnings momentum by escaping the domestic demand slump.
Other notable stocks mentioned were CJ First Manufacturing, Lotte Food, and Binggra. These companies possess a blend of restructuring in their domestic operations, overseas growth momentum, and attractive valuation (price‑to‑earnings relative to peers). Even with weak domestic demand and higher raw‑material costs, they are expected to improve profitability and cut costs, thereby raising market expectations.