DAOL Investment & Securities said on the 17th that Nongshim delivered third-quarter (July–September) results that beat market expectations and is expected to continue earnings growth in the fourth quarter led by the United States. The firm maintained its investment opinion of "Buy" and raised its target price to 550,000 won from 500,000 won. Nongshim's previous trading day closing price was 422,500 won.
Researcher Lee Dayeon at DAOL Investment & Securities said, "Standalone operating profit recorded a surprise, beating market forecasts," and noted, "We raised the fair value estimate in line with the outlook for a rebound in U.S. sales volume in the fourth quarter."
Earlier, Nongshim disclosed on the 14th that on a standalone basis it posted third-quarter sales of 675.2 billion won and operating profit of 41.9 billion won. Those figures rose 1.2% and 146.5%, respectively, from a year earlier.
The researcher explained, "In March, domestic ramen prices were raised, lifting the average selling price (ASP)," adding, "As prices of key materials and supplies such as wheat flour stabilized, the standalone cost-of-sales ratio declined."
The researcher judged that, starting in the fourth quarter of this year (October–December), U.S. results, which had been somewhat sluggish, will rebound. Lee said, "Since September this year, U.S. sales volume has been on a recovery trend," adding, "In particular, the Shin Ramyun brand's U.S. sales in October increased 30% from a year earlier, showing the marketing effects of K-daehun, among others."
Lee added, "The Shin Toomba product is scheduled to expand into mainstream channels such as Costco and Walmart in November," and said, "Profitability is also expected to rebound as the impact of the price hike implemented in July is reflected."