Nongshim (004370) Faces Short-term Cost Pressures Amid Global Expansion: Valuation Bottom Confirmed and Investment Metrics Analysis

Source Facts: Hana Securities Research Center (Based on the report published on July 2, 2026)
Investment Rating & Target Price: BUY (Maintain) / KRW 540,000 (Based on the current price of KRW 341,000)
Key Momentum: Continued top-line growth driven by overseas markets and valuation attractiveness near the historical band bottom.

[Key Investment Metrics & Valuation Data]

Target Price: KRW 540,000
Investment Rating: BUY (Maintain)
Current Valuation Level: Trading at a 12-month Forward PBR of approximately 0.7x, which sits at the historical band bottom, indicating that downside valuation pressure is fundamentally limited.

[Annual Forecast Key Highlights]

Full-Year 2026 Forecast (E):
- Consolidated Revenue: KRW 3.7870 Trillion (YoY +7.8%)
- Consolidated Operating Profit: KRW 199.4 Billion (YoY +8.4%)

[2Q26 Earnings Preview]

Consolidated Estimates: Revenue is projected at KRW 932.4 Billion (YoY +7.4%) and Operating Profit at KRW 46.3 Billion (YoY +15.2%). As sub-material cost increases begin to take effect, overall profitability may slightly undershoot market consensus.
Non-Consolidated Estimates: Revenue is estimated at KRW 697.3 Billion (YoY +0.5%) and Operating Profit at KRW 28.0 Billion (YoY -9.1%), reflecting the impact of domestic price cuts on select products and visible cost burdens.

[Global & Divisional Growth Momentum]

Domestic Market: Domestic ramen sales volume is expected to see a modest increase of around YoY 2.7%, though facing a mixed landscape due to domestic price cuts and rising production costs.
North America & Overseas: The primary engine for earnings improvement this year lies in international operations. In North America, efficient marketing spend is expected to drive an expansion in operating margin by around YoY 2.0%p.
China & Japan Markets: Revenue in China is anticipated to grow by around YoY 20% owing to low base effects and expanded distribution into snack channels. Japan is also set to maintain a revenue growth trajectory of around YoY 20% by introducing core products to major convenience store chains.

Independent Analytical Interpretation: Nongshim’s current valuation at a 12-month Fwd PBR of 0.7x signals a strong structural floor, suggesting that the current market price highly factors in the negative variables. While the upcoming second-quarter performance may feel the pinch from domestic price adjustments and sub-material cost inflation, the core mid-to-long-term narrative remains intact. The key takeaway from the data is the structural shift in revenue composition: the company is successfully pivoting toward higher-margin global markets, evidenced by the optimized ad spending in North America and high double-digit growth in Japan and China. Short-term margin volatility should be weighed against this robust secular expansion in global market share.

Source: This content has been newly structured and written based on financial facts and numerical data from officially disclosed securities research reports.
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