Samyang Foods, KT&G Top Picks as Strong Won Reshapes Margins

Why a Stronger Won Creates Diverging Profit Outcomes for Food Stocks

In an analysis reported by Asia Business Daily Securities on 2026-10-25, Hana Securities analyst Shim Eun-ju views the stronger won not as a uniform positive catalyst for the entire food industry sector, but as a variable that separates companies according to their cost and export structures. For investors, the key is not the direction of the exchange rate itself, but which companies’ profits are most directly affected by the change.

A stronger won benefits companies by reducing the cost of imported raw materials and easing foreign-currency debt burdens. Conversely, companies focused on expanding overseas sales cannot be assessed solely on the cost benefit. Separating what is currently observable from what remains uncertain, lower grain input costs are an estimate, while new plant operations are part of individual companies’ growth plans.

Hana Securities’ Exchange-Rate and Grain Input-Cost Forecasts

A stronger won lowers the local-currency cost of raw materials priced at the same dollar level. Analyst Shim Eun-ju estimated that, if the current exchange rate persists, the won-dollar exchange rate will decline year over year by 7% in the fourth quarter of this year, 9% in the first quarter of next year, and 11% in the second quarter.

Dollar-denominated input costs in the first half of next year are forecast to rise year over year by 14% for corn, 28% for wheat, 18% for soybeans, and 28% for raw sugar. When converted into won, the increases narrow to 6% for corn, 19% for wheat, 10% for soybeans, and 15% for raw sugar. These figures do not mean grain prices will fall; they indicate that the exchange rate would absorb part of the dollar-based increase.

Analyst Shim Eun-ju concluded that, if the current exchange rate is maintained, the food industry’s cost burden next year will be less severe than feared. Ultimately, margins will depend on how movements in international grain prices and the exchange rate flow through to each company’s profits.

Earnings Sensitivity at CJ CheilJedang and Small and Mid-Sized Food Companies

The scale of the benefit varies according to the share of overseas revenue and exposure to foreign-currency debt. Analyst Shim Eun-ju said small and mid-sized food companies with overseas revenue accounting for roughly 40% or less could benefit at the profit level from a decline in the exchange rate.

Hana Securities estimates that the annual operating profit uplift from a lower exchange rate would be 17 billion won for Lotte Wellfood, 12 billion won for Lotte Chilsung Beverage, 11 billion won for Daesang, and 9 billion won for Binggrae. For CJ CheilJedang, which has foreign-currency debt exposure, a lower exchange rate is estimated to improve consolidated net profit by 11%. The figures show that even the same strengthening of the won affects each company’s profits through a different channel.

Separate Rationale Behind Samyang Foods and KT&G as Top Picks

Hana Securities maintained its Overweight rating on the food and tobacco industry sector, as well as its Buy ratings on Samyang Foods, CJ CheilJedang, Nongshim, and KT&G. Its stated price targets are 1.8 million won for Samyang Foods, 370,000 won for CJ CheilJedang, 540,000 won for Nongshim, and 240,000 won for KT&G.

Samyang Foods and KT&G were named the industry sector’s top picks for the short to medium term. Samyang Foods plans to increase its global market penetration through a new plant in China scheduled to begin operations next year, while Nongshim is set to start operating its new Busan plant at the end of this month. Analyst Shim Eun-ju expects the two instant-noodle makers to use their new plants as a springboard for greater global penetration.

Grouping exporters together based solely on the stronger won would obscure the analysis. The investment cases for Samyang Foods and Nongshim rest not only on exchange-rate effects, but also on new plant operations and plans to expand global sales. KT&G was also confirmed as a top pick, although the details and announcement date of its new shareholder-return policy were not included in the available material.

How the Impact on Food Stocks Varies by Company

• Samyang Foods: Hana Securities’ top pick for the short to medium term. Its planned new plant in China next year and expansion of global market penetration are central to the assessment, while the possibility and timing of further global price increases have not been confirmed.
• KT&G: Named a short- to medium-term top pick alongside Samyang Foods. The details and announcement date of its new shareholder-return policy have not been disclosed, requiring follow-up before investors can fully assess it.
• CJ CheilJedang: A company where the stronger won directly affects its foreign-currency debt burden. The key question is whether the estimated 11% improvement in consolidated net profit translates into actual earnings.
• Nongshim: Hana Securities considers the stock to be in an attractive range for bargain buying. The next inflection point is whether its new Busan plant begins operations as planned at the end of this month.
• Lotte Wellfood, Lotte Chilsung Beverage, Daesang, and Binggrae: Individual estimates were provided for the annual operating profit improvement from a lower exchange rate. This aligns with the analysis that companies generating roughly 40% or less of revenue overseas should benefit relatively more.

Exchange-Rate, Plant, and Profit Indicators for Investors to Monitor

• Investors should check whether the projected path of exchange-rate declines continues from the fourth quarter of this year through the second quarter of next year. The actual exchange-rate level and duration of the decline remain uncertain.
• Another point to monitor is whether the won-converted input costs of corn, wheat, soybeans, and raw sugar in the first half of next year approach the projected rates of increase.
• Investors should confirm whether Samyang Foods’ new China plant next year and Nongshim’s new Busan plant at the end of this month begin operations as planned.
• The ultimate test will be whether the estimated benefits materialize in CJ CheilJedang’s consolidated net profit and the annual operating profit of Lotte Wellfood, Lotte Chilsung Beverage, Daesang, and Binggrae.

Conditions for Exchange-Rate Benefits to Translate into Earnings

Under the optimistic scenario, the current exchange rate persists and the increase in won-converted grain input costs remains below the dollar-denominated increase. If Samyang Foods and Nongshim also expand their global penetration through their new plants, lower cost pressure and higher sales would operate as separate growth drivers.

This scenario would break down if the actual exchange rate deviates from the projected path or if grain input costs and profit improvements fail to materialize as estimated. The next assessment should proceed in order: the actual duration of the exchange-rate decline, won-converted input costs, new plant operations, and the timing of the impact on each company’s profits. The figures recorded in earnings matter more than the forecasts announced beforehand.

This article was automatically summarized and analyzed based on the original news report. View the Original Article (Asia Business Daily Securities)