Is Nongshim's Shin Ramyun Set for a Comeback?

Operating Profit Reaches 54.4 Billion Won in Q3, Up 45% Year-on-Year
Rising Overseas Sales Growth Fuels Expectations for Share Price Increase

Nongshim has received favorable reviews from the Yeouido financial community after posting third-quarter operating profit that exceeded market expectations this year. Analysts predict that the company has entered a full-fledged phase of profitability improvement and that its corporate value is expected to grow.

According to the financial investment industry on November 18, Nongshim’s stock price has risen by 23.5% so far this year. Considering that the KOSPI index rose by 70.4% during the same period, Nongshim’s return was underwhelming compared to the market. In comparison, competitor Samyang Foods’ stock price increased by 81.0%.

Although the stock price increase was relatively modest, there are forecasts that Nongshim’s corporate value will expand along with a significant increase in profits starting from the fourth quarter of this year.

On a consolidated basis, Nongshim posted sales of 871.2 billion won and operating profit of 54.4 billion won in the third quarter of this year. Compared to the same period last year, sales increased by 2%, and operating profit surged by 45%. Operating profit exceeded the market consensus of 45.2 billion won. Jang Ji-hye, a researcher at DS Investment & Securities, explained, "The significant profit growth was driven by the stabilization of prices for major raw materials, excluding palm oil, and a reduction in fixed cost burdens due to increased sales."

Overseas subsidiaries recorded sales of 266.1 billion won, up 14% from the same period last year. While sales in North America declined, sales increased in subsidiaries in China, Japan, Australia, and Vietnam. Joo Young-hoon, a researcher at NH Investment & Securities, noted, "It is regrettable that sales volume decreased in the key market of the United States following price hikes." However, he added, "Since September this year, demand has been recovering, so sales may increase in the fourth quarter."

After reviewing Nongshim’s third-quarter results, the Yeouido financial community unanimously raised their target prices for the company. DS Investment & Securities raised its target price from 540,000 won to 600,000 won, while Korea Investment & Securities raised its target from 550,000 won to 600,000 won.

Kang Eunji, a researcher at Korea Investment & Securities, stated, "It is time to focus on the potential for sales growth reflecting the aggressive localization strategy and gradual price increases at the North American subsidiary." She predicted, "Nongshim’s North American business will record a high single-digit sales growth rate starting from the fourth quarter of this year."

Park Sangjun, a researcher at Kiwoom Securities, also commented, "With the collaboration effect of the Netflix animated film 'K-Pop Demon Hunters' being fully reflected, sales growth will improve compared to the third quarter, especially for the North American subsidiary." He added, "Nongshim has expanded its 'K-Pop Demon Hunters' collaboration products in the United States from two to eight items." He continued, "Since last month, the Shin Ramyun brand has been showing strong growth," and projected, "In the fourth quarter, the North American subsidiary’s sales and operating profit will increase compared to the third quarter."

Cho Sanghoon, a researcher at Shinhan Investment & Securities, said, "The 'K-Pop Demon Hunters' collaboration products will be sold through the first quarter of next year," and evaluated, "This will be a positive factor, as it can enhance marketing capabilities, which had previously lagged behind the high product quality."

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