[Click eStock] "Nongshim, Q2 Earnings Expected to Exceed Estimates... Target Price Raised"

Daishin Securities Issues 'Buy' Investment Opinion and Sets Target Price at 410,000 Won... Closing Price on 16th at 355,500 Won

Nongshim Shin Ramyun (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] An analysis has emerged that Nongshim's second-quarter performance will exceed expectations.

According to Daishin Securities on the 17th, Nongshim's consolidated sales for the second quarter of this year are estimated at 680.2 billion KRW, with an operating profit of 38.9 billion KRW. These figures represent increases of 20% and 374% respectively compared to the previous year. They also significantly surpass the previous Daishin Securities estimated operating profit of 18.5 billion KRW and the consensus operating profit of 28.3 billion KRW.

Nongshim is increasing its market share. The domestic ramen market grew by 9% year-on-year in the second quarter of this year, with Nongshim's ramen market share rising by 1 percentage point to 56%. Yoojeong Han, a researcher at Daishin Securities, stated, "It is most encouraging that Nongshim's ramen market share has been recovering since 2019. Due to increased demand and strong sales of flagship products, the significant profitability improvement of the separate corporation seen in the first quarter is expected to continue into the second quarter, and the demand increase for processed foods is likely to persist in the second half of the year. Accordingly, the domestic ramen market is expected to reach a record high of 2.4 trillion KRW this year."

The North American ramen market share is also expected to be positive. Nongshim's North American ramen market share in the second quarter of this year is estimated to increase by 2 to 3 percentage points. Due to market share expansion and market growth, sales are expected to grow by 39% compared to the previous year.

Researcher Han said, "Although there may be concerns about the period after the second quarter following the strong first-quarter performance and the second-quarter surprise, it is premature to discuss the peak timing of the domestic and overseas ramen markets given the highly contagious nature of the novel coronavirus infection (COVID-19). Since market share expansion is occurring in Korea and North America, where sales and profit proportions are highest, the current results are encouraging. We also believe there is sufficient reason to expect future growth."

Daishin Securities has issued a 'Buy' investment opinion on Nongshim. The target stock price has been raised from 390,000 KRW to 410,000 KRW. The closing price on the 16th was 355,500 KRW.

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