[Click eStock] "Nongshim Ramen Exceeds Expectations Domestically and Internationally"

NH Investment & Securities Report

NH Investment & Securities analyzed on the 16th that Nongshim's domestic and overseas subsidiaries achieved results exceeding market expectations in the first quarter of this year. The investment opinion remains a buy, and the target stock price was raised from 430,000 KRW to 510,000 KRW.

Joo Young-hoon, a researcher at NH Investment & Securities, explained, "The consolidated sales for the first quarter of this year increased by 17% year-on-year to 860.4 billion KRW, and operating profit rose by 86% to 63.8 billion KRW, significantly surpassing market expectations. Stable performance from domestic and overseas subsidiaries combined to deliver surprise results every quarter."

Nongshim's domestic sales amounted to 595.9 billion KRW, a 14% increase compared to last year. Major product categories all showed growth compared to the previous year. In the case of ramen, prices were raised in the second half of last year, but demand resistance was not significant. Overseas subsidiary sales reached 264.5 billion KRW, up 24% from the previous year. Strong sales continued as ramen demand increased in key overseas markets.

Researcher Joo stated, "Although sales in China were somewhat sluggish, sales growth was achieved in all other regions. In particular, the growth rate of the U.S. subsidiary accounted for half of the increase in consolidated results."

He added, "The target stock price was calculated by applying a price-to-earnings ratio (PER) of 20 times to the 12-month forward net income attributable to controlling shareholders estimate. The adjustment of the valuation from 19 times to 20 times reflects the improved profitability of the U.S. subsidiary."