Hana Financial Investment maintained its investment opinion "buy" and target stock price of 500,000 won on Nongshim on the 30th, saying that it is time for Nongshim to increase profits in the second half and buy low-priced stocks.
Nongshim said on the 29th that it will raise the factory price of major ramen by 6.8% on average from the 16th of next month. This is the first increase in about five years since the market price hike in December 2016.
"Nongshim's price hike was an inevitable choice due to the increased burden of major raw materials such as raw beer, palm oil and boxes," Hana Financial Investment said. "Annual sales and operating profit are expected to increase by 3.3% and 35%, respectively, and improve by about 40 billion won based on total sales profit.".
Hana Financial Investment explained, "The price increase will be reflected in the performance from November, and a solid profit improvement is expected from the fourth quarter of this year to the second half of next year.". A reassessment of mid- to long-term overseas growth is also expected. "Nongshim's global awareness is expanding due to COVID-19, and its export and overseas subsidiaries are recording net growth compared to the same period last year,"
Hana Financial Investment said. "The overseas portion will also be expanded from 30 percent in 2019 to 38 percent this year.".
Reporter Lee Dong-hoon email@example.com