[Special Stock] Nongshim Drops Over 6% on Q3 Earnings Shock

Nongshim is showing a sharp decline after recording poor performance in the third quarter of this year.

As of 9:14 a.m. on the 15th, Nongshim is trading at 337,000 won, down 25,000 won (6.91%) from the previous day.

The weak third-quarter performance appears to have dragged down the stock price. The day before, Nongshim announced that its consolidated operating profit for the third quarter of this year decreased by 32.5% year-on-year to 37.6 billion won. Sales were recorded at 850.4 billion won, down 0.6%.

Won Woo-jung, a researcher at Kyobo Securities, said, "Nongshim's third-quarter results fell significantly below the lowered market expectations," adding, "The main reasons for the decline are domestic sluggishness, delays in concluding transactions with Youbei in China, and increased promotional expenses in North America." Reflecting the downward revision of next year's estimates, Kyobo Securities lowered Nongshim's target stock price from 510,000 won to 460,000 won.

Shinhan Investment Corp. also lowered Nongshim's target stock price by 7% to 500,000 won. Cho Sang-hoon, a researcher at Shinhan Investment Corp., said, "This reflects the downward revision of domestic profit estimates due to prolonged consumption stagnation and increased promotional burdens," adding, "Although the overseas sales growth momentum slowed from the second half of last year to the first half of this year, it is recovering from the second half of this year, so a stock price rebound is expected." He added, "The previously stalled external growth will become visible again from the fourth quarter."