Korea Investment & Securities noted on the 16th that an improvement in the second quarter (April to June) performance of Nongshim is expected. They maintained their investment opinion of 'buy' and raised the target price from 450,000 won to 480,000 won.
Kang Eun-ji, a researcher at Korea Investment & Securities, said, "Starting from the second quarter, profitability is expected to improve due to reduced promotional expense, the reflection of price increase effects, and the re-contracting of materials and supplies."
She added, "If the increase in overseas revenue and profitability improvements through the global launch performance of Shin Ramyeon Tumbah are confirmed in the future, upward adjustments to earnings estimates may also be possible."
Nongshim announced on the 15th that its consolidated revenue for the first quarter (January to March) was 893 billion won, with an operating profit of 56 billion won. Revenue increased by 2% compared to the same period last year, while operating profit decreased by 8%.
Researcher Kang noted, "Although shipments for both the U.S. and Canadian subsidiaries increased, the operating profit decreased due to increased promotional expenditure by the U.S. subsidiary. However, it is expected that, compared to the first quarter, expense expenditures will be gradually reduced through efficient expense execution."