Yuanta Securities Korea noted on the 22nd that a rebound is expected for Nongshim due to the expansion of overseas Tombar product placements in the second half of the year. It is anticipated that with the government's support payments and a recovery in consumer sentiment domestically, both sales and profits could see an increase. The target stock price is 490,000 won, and the investment opinion remains 'buy.'
Nongshim's consolidated revenue for the second quarter is expected to be 900.4 billion won, with operating profit estimated at 49.4 billion won. These figures represent an increase of 4.6% and 13.1%, respectively, compared to the same period last year. Domestically, the effects of instant noodle price increases are projected to drive profitability improvements. However, in overseas markets, the contribution to profits may be somewhat limited due to increased marketing expenses related to the Tombar new product.
Tombar is a new product version of Nongshim's representative product, Shin Ramyun, and has been available at all Seven Eleven stores in Japan since April, selling out its initial stock. The launch effects of the Tombar new product are expected to intensify in China, confirming the potential for global expansion, primarily in the Asian region.
However, the North American subsidiary has tested the Tombar new product in some Walmart stores in April and Costco in May, with limited contribution to sales. Additional placements in major channels are scheduled for the second half of the year, so the contribution to earnings is expected to materialize over time.
Son Hyun-jung, a researcher at Yuanta Securities Korea, said, 'Nongshim's performance improvement is expected to pick up in the second half of the year,' and added that 'the global expansion of the Tombar new product and the price increase in North America in the third quarter will be significant turning points for performance growth.'