[Click eStock] "Nongshim Accelerates Shin Ramyun Tomba Overseas Entry"

KB Securities forecasted that Nongshim's operating profit margin will improve through product price increases, and the overseas launch effect of 'Shin Ramyun Tomba' will become full-fledged from the second quarter of this year. The investment opinion was maintained as 'Buy' with a target price of 520,000 KRW. Based on the closing price on the 12th, there is a 33% upside potential.

Nongshim's consolidated sales in the fourth quarter of last year recorded 855.1 billion KRW, a 0.2% decrease compared to the same period last year, and operating profit dropped by about 47% to 20.4 billion KRW, falling short of market expectations. Eun-ae Ryu, a researcher at KB Securities, explained, "The main reason for the consensus miss was the increased domestic and overseas cost burden," adding, "Although Shin Ramyun Tomba showed good performance as a new product with monthly sales of about 5 billion KRW on a separate basis, operating profit margin declined due to expanded promotional expenses amid domestic demand stagnation and increased one-time labor cost burdens."

Nongshim will raise the ex-factory prices of 17 brands, including ramen and snacks, by an average of 7.2% starting from the 17th. Researcher Ryu estimated, "The contribution of the price increase to operating profit is about 20 billion KRW," and noted, "The increased ex-factory prices are expected to be fully reflected from April, after the distribution channel inventories are depleted."

The sales of Shin Ramyun Tomba, which is rapidly entering overseas channels, are also an expected factor. In the U.S., it was confirmed to enter Walmart online in mid-March and 1,000 Walmart offline stores in April. Researcher Ryu evaluated, "The demand from distribution channels for Shin Ramyun Tomba is higher than expected," and "More aggressive marketing than before is expected to accelerate the global expansion of Shin Ramyun Tomba."