[Click eStock] "Nongshim, 'Ramyeon' Global Demand Up... Earnings Improvement Expected"

Published 11 Jul.2024 08:31(KST)

Hana Securities maintained its 'buy' rating and a target price of 540,000 KRW for Nongshim on the 11th, despite expecting a decline in second-quarter earnings. The analysis suggests a high likelihood of rapid performance improvement as the business environment becomes more favorable.

Jjapagetti 3 Types

Hana Securities forecasted that Nongshim will achieve sales of 862.8 billion KRW in the second quarter of this year, a 3% increase compared to the same period last year. Operating profit is expected to decline by 12.8% to 46.8 billion KRW, which is somewhat below market expectations.

Sim Eun-joo, an analyst at Hana Securities, observed, "Sales (domestic + export) likely increased by about 5% compared to last year due to strong sales of new products such as ‘Jjapagetti Black’," adding, "Exports are expected to have grown by 25%."

Analyst Sim explained, "Global demand for ramen products surged, leading to maintenance of domestic production lines in the first quarter," and added, "With expanded production capacity (CAPA), export volumes are expected to increase rapidly for the time being."

He also projected, "Interest in K-Food is rising in Europe, especially with the upcoming ‘Paris Olympics’," and forecasted, "Sales growth will accelerate in North America and China due to new product launches and distributor replacements."