[THE INVESTOR] Nongshim’s earnings will pick up in the fourth quarter boosted by improved sales of instant noodles, said KB Investment and Securities on Dec. 5 raising the target price to 320,000 won (US$287.67) from 300,000 won.
In addition to low baseline effect, 6 percent gain in ramen sales and cost cutting will push its revenue up 3.8 percent on-year to 565.5 billion won and operating profit by 67.2 percent to 24 billion won, Revamping its flagship products has been positive without significant costs. Its share in the domestic ramen market in the fourth quarter will rise 0.2 percent point from the same period last year and 2.5 percent point from the previous quarter to 57.6 percent, said analyst Park Ae-ran.
Although the business environment is taxing, expanding flavors and modifying types of existing products will improve its market share. It is currently undervalued at 0.8 times its price-to-book ratio, said the analyst maintaining a “buy” recommendation.
By Hwang You-mee (email@example.com)