[Click eStock] "Nongshim, Focus on Strong Q1 Performance"

Hi Investment & Securities Issues 'Buy' Rating and 400,000 KRW Target Price... Closing Price on 15th at 325,000 KRW

[Asia Economy Reporter Kum Boryeong] Nongshim is gaining attention as it posted strong first-quarter results.

According to Hi Investment & Securities on the 18th, Nongshim's consolidated first-quarter performance recorded sales of 687.7 billion KRW and operating profit of 63.6 billion KRW. These figures represent increases of 16.8% and 101.1%, respectively, compared to the previous year.

Domestic sales grew by 17.5% year-on-year, driven by a volume increase of 17.2%, which led to external growth. Additionally, market interest rose based on content marketing efforts initiated at the end of last year, along with growth attributed to the movie "Gisaengchung" (Parasite) effect. From mid-February, the increase in volume centered on main brand products due to the impact of the novel coronavirus disease (COVID-19) was fully reflected.

Lee Kyung-shin, a researcher at Hi Investment & Securities, explained, "As the consumption trend focused on home dining continues into the second quarter, despite some stabilization of the explosive increase in certain consumption areas, the growth rate compared to the same period last year remains high. Considering the ramen market situation returning to existing products, although there are differences in degree, the overall trend is likely to continue throughout this year." He added, "The snack market is also experiencing a similar consumption increase trend, and since this is fully reflected in operating results, the same effect as ramen is expected."

The Chinese government excluded ramen products from the forced factory shutdowns in early February. Thanks to a consumption pattern similar to stockpiling in Korea, sales volume expanded. The researcher noted, "It is important to focus on the fact that this accelerated the recovery of market dominance, which had worsened due to the existing Terminal High Altitude Area Defense (THAAD) issue, rather than the future burden of a temporary rise." He also said, "Attention should be paid to the possibility that the regional expansion strategy toward the western inland will become easier."

Hi Investment & Securities has issued a "Buy" investment opinion on Nongshim. The target stock price was raised from 380,000 KRW to 400,000 KRW. The closing price on the 15th was 325,000 KRW.

This content was produced with the assistance of AI translation services.