[Click eStock] "Nongshim, Earnings Growth Trend... North America Sales Up"

Hanwha Investment & Securities Report

On the 18th, Hanwha Investment & Securities raised its profit estimates for Nongshim and increased the target stock price from 450,000 KRW to 600,000 KRW. The investment opinion of 'Buy' and the designation as the top preferred stock in the food and beverage sector were also maintained.

Han Yoo-jung, a researcher at Hanwha Investment & Securities, stated, "The expansion of entry into major liquor channels in the U.S., such as Costco and Sam's Club, and the increase in product SKUs beyond the Shin Ramyun brand to include Donkotsu Sabal and Saengsaengmyeon are positive factors," adding, "North American sales are expected to exceed 731.2 billion KRW, up 26.9% year-on-year, surpassing a 20% share."

The researcher explained, "The operation of the second U.S. factory is expected to improve the efficiency of the first factory, which had exceeded its optimal operating rate, and reduce transportation costs by decreasing the import ratio from Korea," further stating, "Operating profit in North America for 2023 is expected to reach 54.9 billion KRW, approaching a 30% share."

The market share of Korean ramen stands at 56.4%, similar to last year. As the market atmosphere is moving away from price competition, this is positive for Nongshim's competitiveness, which has a diversified product portfolio.

The researcher added, "The cutthroat competition that overheated until 2019 has disappeared, and with the decline in raw material input costs, profitability, which was abnormal, is expected to normalize."

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