April 20, 2024

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[THE INVESTOR] Ottogi will grow on the back of strong sales of home meal replacement and instant noodles, said IBK Securities on June 29, maintaining a “buy” recommendation and 1 million won (US$892.86) target price.

Its revenue in the second quarter will rise 5.4 percent on-year to 541.3 billion won and operating profit by 25.2 percent to 52 billion won. It will not only flourish in home meal replacements, but will grow across sectors including condiments and oils that have been slow in the previous quarter. 

In the wake of merger with affiliates such as Ottogi Logistics Service and RDS last year, costs in inside transaction have been cut and will boost the profitability momentum. Its second-quarter operating profit will beat market consensus, estimated analyst Kim Tae-hyeon.

Sales of noodles in the period will increase 7.8 percent on-year to 166.5 billion won, pushing the market share slightly up to record 26.8 percent, thanks to the launch of seasonal products as well as the solid growth of Jin Ramen. Combined average monthly sales of new instant noodles targeting summer is 4 billion won, making up for last year’s weak market share in the second quarter, he added.

By Hwang You-mee (glamazon@heraldcorp.com)