[Edaily Reporter KIM YOON-JEONG ] Yuanta Securities Korea projected that Nongshim(004370)will post earnings exceeding market expectations in the second quarter, driven by growth in overseas sales and improved profitability in North America. While cost pressures are expected to increase in the second half of the year, the firm anticipates that expanded overseas sales will partially offset these cost burdens. It maintained its “Buy” investment rating and target price of 530,000 won.

On the 21st, Son Hyun-jung, an analyst at Yuanta Securities Korea, stated, “Consolidated operating profit for the second quarter is projected to reach 57.7 billion won, exceeding the consensus by more than 10%,” adding, “Growth in overseas sales and improved profitability in North America will drive these results.”
Yuanta Securities Korea projected that Nongshim’s second-quarter consolidated revenue would reach 936.7 billion won, a 7.9% increase year-over-year, while operating profit would rise 43.8% to 57.7 billion won. The operating profit margin (OPM) was estimated at 6.2%.
Domestic standalone revenue is expected to reach 721.4 billion won, a 4.0% increase year-over-year. While instant noodle sales are projected to rise by only 2.0% and snack sales by 1.0%, the firm analyzed that new product launches and increased exports will drive overall revenue growth. Export revenue is forecast to increase by 15.0% year-over-year, driven by expanded sales not only in Europe but also in Eastern Europe and Southeast Asia.
Revenue from overseas subsidiaries is estimated to reach 313.7 billion won, a 29.4% increase year-over-year. North American revenue is expected to rise 12.0% to 160.4 billion won, driven by increased sales of mainstream products—led by Shin Ramyun—and expanded distribution through local retail chains. Profitability is also expected to improve due to the effects of last year’s price hikes and the leverage effect of fixed costs resulting from increased sales.
The company projected that double-digit growth would continue across all regions, with sales in China expected to reach 48.3 billion won (up 15.0% year-over-year), Japan at 41.2 billion won (up 10.0%), Australia at 19.9 billion won (up 24.0%), and Vietnam at 4.4 billion won (up 17.0%). Sales in Europe are expected to surge by 329.3% year-over-year to 39.5 billion won, driven by the expansion of SKUs—primarily in the UK and Germany—and the impact of entering new markets.
Analyst Son stated, “In the second half of the year, the full impact of rising packaging material and palm oil prices is expected to be reflected, slowing the pace of domestic profitability improvement,” but added, “The recovery in North American sales, the effects of price increases, and the expansion of overseas sales in Europe, China, and Japan will partially offset the cost burden and support the bottom line for the entire company.”
He continued, “Following the launch of the Noksan plant dedicated to exports in October, supply capacity to Europe, Russia, and the Commonwealth of Independent States (CIS) is expected to expand, strengthening the foundation for overseas growth.” He added, “Considering that second-quarter operating profit exceeded the consensus and the increased profit contribution from overseas subsidiaries, we maintain our ‘Buy’ rating and a target price of 530,000 won.”