[Click e-Stock] "Nongshim Continues to Expand Its Global Presence"

On September 1, Hana Securities assessed that Nongshim is expected to see improved performance both domestically and internationally in the second half of this year, and that its valuation (the stock price relative to corporate value) remains attractive. The investment opinion is maintained as "Buy," and the target price is set at 5.4 million won.

Previously, it was noted that in July, Nongshim implemented a price increase of just over 10% in the Americas, which is expected to have a positive impact on third-quarter results. The full-scale entry of "Shin Ramyun Tumba" into major distribution channels such as Walmart is also a positive factor.

Shim Eunju, a researcher at Hana Securities, stated, "The European subsidiary is expected to recover sales after reorganizing its business partners, and in Korea, standalone second-quarter profit improved by 13.5 billion won year-on-year to reach 30.8 billion won, indicating a rapid recovery in profitability." She estimated that, thanks to internal cost-efficiency efforts, this year's standalone operating margin will improve by 1.4 percentage points compared to last year.

Global expansion is also ongoing. In the second quarter, the sales growth rates in the Americas (North and South America) for major ramen companies are estimated as follows: Samyang Foods grew by 35.2% year-on-year (33% in dollar terms), Nongshim declined by 4.6% (-7%), Toyosu Foods fell by 4.7% (2%), and Nissin Foods decreased by 20.5% (-13%).

Researcher Shim commented, "Although Nongshim's short-term profitability fluctuations are disappointing, the gradual increase in market share is a positive sign," adding, "Starting in the third quarter, the effect of price hikes in the Americas will be reflected, which will have a positive impact on profitability and topline growth in the second half of the year."