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Photo = Nongshim |
[Alpha Biz= Paul Lee] Nongshim is expected to post improved earnings driven by recent price hikes on core products and strong growth from its overseas subsidiaries. Expectations are also rising for the launch of its new global product, Shin Ramyun Tomba, in the second half of the year.
According to a report released on May 22 by Ha Hoe-ji, an analyst at Hyundai Motor Securities, Nongshim’s consolidated revenue for H2 2024 is projected to increase by 5.7% year-over-year to KRW 1.8032 trillion, with operating profit expected to surge 48.7% to KRW 86.3 billion. Reflecting this positive outlook, the analyst raised the stock’s target price from KRW 460,000 to KRW 520,000, maintaining a "Buy" recommendation.
Ha noted that although domestic demand growth has slowed due to continued economic downturns, the average 7.2% price hike across 17 ramen and snack products, implemented on March 17, is expected to contribute fully to sales from April onwards. The estimated impact from the price adjustment includes an increase of KRW 65–70 billion in revenue and KRW 20 billion in operating profit.
The report also highlighted that Shin Ramyun Tomba has begun launching in major overseas retail channels, including Walmart in April and Costco LA in May, with expectations for improved operational efficiency and margin gains in the latter half of the year.
In addition, Nongshim completed the establishment of its European sales subsidiary in March, and revenue recognition from the region is expected to begin in June, with an annual sales target of KRW 150 billion.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
