[Click eStock] "Nongshim, Next Year's Earnings Momentum Highlighted... A Buying Opportunity at Low Prices"

[Asia Economy Reporter Myunghwan Lee] Hana Securities announced on the 14th that it has given a buy rating and a target price of 440,000 KRW for Nongshim. It also analyzed that Nongshim's current stock price level is a buying opportunity due to expected improvement in next year's performance.

Hana Securities forecasted that Nongshim's consolidated sales for next year will increase by 9.5% year-on-year to 3.3293 trillion KRW, and operating profit will grow by 46.2% to 137.3 billion KRW, highlighting performance momentum within the industry. This is because quarterly profits have already passed the bottom, and the effect of price increases will be gradually reflected each quarter.

Hana Securities estimates that the decline in profits compared to the same period last year will significantly narrow starting from the third quarter of this year. It projected Nongshim's third-quarter consolidated operating profit to decrease by 33.7% year-on-year to 19.3 billion KRW. Previously, Nongshim's second-quarter consolidated operating profit had plunged 75.4% compared to the same period last year.

Hana Securities analyzed that Nongshim will defend profits through export and overseas subsidiaries' price adjustments and efficiency improvements in advertising and promotional expenses. From the fourth quarter onward through next year, the price increase effects on domestic ramen and snacks are expected to be reflected, showing a meaningful profit growth trend.

It also assessed Nongshim's recent change in management policy as positive. Nongshim is reportedly pursuing a stake acquisition in Cheonho N Care. Cheonho N Care mainly produces and sells extract products such as black goat and black garlic, with a corporate value estimated at about 80 billion KRW, according to Hana Securities. Although the price is not cheap, it is analyzed that Nongshim participated in the bid considering Cheonho N Care's production know-how, portfolio diversification, and synergies among business units.

Hana Securities evaluated positively that Nongshim, which had been somewhat passive to changes in the past, has shown proactiveness in mergers and acquisitions and overseas business expansion since Chairman Shin Dong-won's inauguration.

Sim Eun-joo, a researcher at Hana Securities, advised, "The current stock price is located at the lower end of the historical band, making it an attractive valuation," adding, "Considering meaningful profit leverage next year, buying at a low price is valid."

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