[Alpha Biz= Ellie Kim] Hyundai Motor Securities on June 11 raised its target price for Nongshim to 550,000 won from 540,000 won, maintaining a “Buy” rating, citing increasing contributions from overseas operations.

Analyst Ha Hee-ji said that while a rebound in U.S. sales remains the key driver for share price upside, contributions from regions outside the U.S. continue to grow. She also highlighted expectations for expanded European sales following the launch of the Noksan export plant in the fourth quarter.

Nongshim reported first-quarter revenue of 934 billion won, up 4.6% year-on-year, and operating profit of 67.4 billion won, a 20.3% increase. Domestic sales rose 3.1%, while operating profit grew 24.4%, supported by new product launches and export growth despite higher marketing costs.

Overseas performance was stronger, with revenue increasing 23.1% and operating profit surging 53.0%. While U.S. sales volume remained weak, growth in mainstream channels centered on its flagship Shin Ramyun continued, alongside improving profitability driven by price hikes and reduced marketing expenses.

In China, expanded distribution channels and increased production of new products helped ease fixed cost burdens and boost earnings contributions. In Europe, distribution of Shin Ramyun Toomba is accelerating across key retail channels.

Hyundai Motor Securities forecasts Nongshim’s second-quarter revenue to rise 5.5% year-on-year to 915.7 billion won, with operating profit expected to increase 18.8% to 47.7 billion won.

Domestic revenue is projected to decline slightly by 0.2%, although operating profit is expected to rise 10.1%. The analyst noted that while new product launches may help sustain sales, exports could decline due to accounting adjustments following the establishment of a European subsidiary. Additionally, the impact of earlier price increases is expected to fade, while rising oil and raw material costs may weigh on margins.

Overseas revenue and operating profit are projected to grow 21.9% and 21.3%, respectively. U.S. sales are expected to show modest improvement quarter-on-quarter, while China is likely to benefit from growth in snack-focused channels. In Europe, the rollout of Shin Ramyun Toomba continues to expand, and the company is preparing to launch operations in Russia in June.

 

 

 

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