[Click eStock] "Nongshim, Expecting Chapaguri Effect... Target Price Up 17%"

[Asia Economy Reporter Park Jihwan] Daishin Securities evaluated Nongshim on the 17th, stating, "The 'Jjapaguri (Jjapaghetti + Neoguri),' which first appeared in 2009 by netizens, has recently gained high popularity due to the Parasite effect," and assessed that there is a high possibility of market share expansion in the future. Accordingly, they maintained the investment opinion as 'Buy' and raised the target price by 17% from the previous 290,000 KRW to 340,000 KRW.

Han Yujeong, a researcher at Daishin Securities, analyzed, "Assuming that Asian ramen consumption in the U.S. increases by about 3% and non-Asian ramen consumption increases by about 5% thanks to this popularity, and assuming the operating profit margin of the product is at a high level of around 10%, Nongshim's consolidated operating profit in 2020 could reach up to 96.2 billion KRW."

Researcher Han stated, "Nongshim's consolidated sales in the fourth quarter of last year recorded 597.3 billion KRW, a 4% increase compared to the previous year, and operating profit recorded 20.4 billion KRW, a 21% decrease," adding, "Considering that Nongshim's consensus has not been significantly adjusted over the past six months, it is expected to show a level that meets expectations."

He explained, "It is still early to discuss the sustainability of the popularity, so only a part of it was reflected in the earnings estimates," and added, "Encouraging results are expected due to the expansion of overseas sales of non-core product lines besides traditional products."

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