Korea Investment Securities noted on the 29th that the future global launch performance of Shin Ramyeon Tumba is expected to drive the stock price. They maintained a 'buy' investment opinion and adjusted the target price upward by 8.3% from the previous 480,000 won to 520,000 won. The closing price of Nongshim on the previous trading day was 416,000 won.
Kang Eun-ji, a researcher at Korea Investment Securities, said, “The increase in overseas revenue and the potential for profit improvement through the future global launch performance of Shin Ramyeon Tumba will drive the increase in the stock price.”
They estimated that in the second quarter of this year (Apr. to Jun.), Nongshim would record revenue of 898.8 billion won and operating profit of 48.5 billion won. This represents increases of 4.4% and 11%, respectively, compared to the same period last year.
Although the expense for advertising to enter the mainstream market for Shin Ramyeon Tumba will continue to decrease profitability, Kang believes that the initial entry effect will increase shipment volumes.
Researcher Kang noted, “By the end of the year, expenditures for marketing to establish Shin Ramyeon Tumba will continue,” adding, “However, since the reduction of promotion expenses in domestic operations is leading to increased operating profit, the increase in shipment volumes that can be achieved through expenditures is a critical period, rather than concerns about expenses in overseas operations.”
Shin Ramyeon Tumba has currently entered Walmart and Costco stores in the LA area as mainstream channels in the U.S. Additionally, it is also in the process of entering Japan's CVS (convenience store) channel and China's mainstream channels.