KOSPIFood & Beverage004370

Nongshim

₩403,000▲ 0.62%2026-10-02 close

Market Cap

₩2.5T

Turnover

₩4.9B

Volume

10K

Shares out.

6.1M

PER

12.7×

PBR

0.8×

EPS

₩33,790

Dividend Yield

1.40%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩6,000 per share · Prices as of the 2026-10-02 close

Report overview

Overseas Pulls, Domestic Costs Push Back

Nongshim is in a split phase: overseas subsidiaries and exports are driving a fast-rising share of profit, while the domestic business is squeezed by shrinking consumption and higher input and packaging costs.

1
In Q2 2026 consolidated revenue was KRW 956.1bn with operating profit of KRW 59.3bn, lifting the quarterly operating margin back above 6%, following Q1 2026 revenue of KRW 934.0bn and operating profit of KRW 67.4bn - two consecutive quarters of improvement.
2
On an annual basis the operating margin swung from 3.6% in 2022 to 6.2% in 2023, fell back to 4.7% in 2024 and recovered to 5.2% in 2025, showing meaningful margin volatility.
3
Overseas sales accounted for 40.2% of first-half 2026 revenue; domestic entity sales fell 0.5% while overseas subsidiary sales rose 26.8%.
4
Once the Busan Noksan export-only plant is completed, three lines will produce 500m units a year; combined with the existing Busan (600m) and Gumi (100m) output, export-dedicated ramyun capacity roughly doubles to 1.2bn units a year.
5
First-half average import prices were USD 214/t for wheat (up 9.2% year on year) and USD 1,139/t for palm oil (up 9.2%), and Nongshim raised prices on 43 brands by an average of 5.8% from August, citing naphtha costs, while keeping bag-type ramyun unchanged.

Business structure

Nongshim is a diversified food company built around ramyun and snacks, with long-lived brands such as Shin Ramyun, Chapagetti, Neoguri and Ansung Tangmyun, snacks including Saewookkang and potato chips, and Baeksansu bottled water.

Brand power centred on Shin Ramyun, a nationwide distribution network and a stable product portfolio have kept it at the head of the domestic ramyun market.

Overseas operations run through two channels, exports and local subsidiaries: unlike Samyang Foods, which produces everything in Korea for export, Nongshim runs two plants in the United States producing and selling locally, each with maximum annual capacity of 500m units, or 1bn combined.

In Q1 2026 the US entity posted revenue of KRW 164.1bn, about half of all overseas subsidiary sales, reflecting a Shin Ramyun-led premium strategy that expanded shelf presence at Walmart and Costco. First-half 2026 US entity revenue reached KRW 287.3bn, up 10.6% year on year, while China entity sales rose 21.9%.

China posted first-half revenue of KRW 229.1bn and operating profit of KRW 11.6bn, up 22.6% and 45.0% respectively, helped by expansion into offline snack-store and new retail channels.

In March 2025 the company established a sales entity in Amsterdam to push into Europe, and alongside the Australian unit, a Russian entity opened in June 2026 is expected to serve as a base for the Commonwealth of Independent States region.

Competition is two-tiered: against Ottogi, Samyang Foods and Paldo at home, and against Samyang Foods' Buldak brand and global players such as Japan's Nissin Foods abroad. The company operates production bases in the United States and China and exports Shin Ramyun to around 100 countries.

Earnings trend

Quarterly revenue · Operating profit

₩867.7B₩40.2B25Q2₩871.2B₩54.4B25Q3₩882.4B₩33.4B25Q4₩934B₩67.4B26Q1₩956.1B₩59.3B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩3.1T₩112.2B2022₩3.4T₩212.1B2023₩3.4T₩163.1B2024₩3.5T₩183.9B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩867.7B	₩40.2B	4.6%
2025Q3	₩871.2B	₩54.4B	6.2%
2025Q4	₩882.4B	₩33.4B	3.8%
2026Q1	₩934B	₩67.4B	7.2%
2026Q2	₩956.1B	₩59.3B	6.2%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩3.1T	₩112.2B	₩116.1B	3.6%	5.0%	31.1%
2023	₩3.4T	₩212.1B	₩171.9B	6.2%	7.1%	32.5%
2024	₩3.4T	₩163.1B	₩157.3B	4.7%	5.9%	34.6%
2025	₩3.5T	₩183.9B	₩170.1B	5.2%	6.0%	35.0%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

Annual revenue rose for four straight years - KRW 3,129.1bn in 2022, KRW 3,410.6bn in 2023, KRW 3,438.7bn in 2024 and KRW 3,514.3bn in 2025 - though the pace slowed after 2023.

Operating profit jumped from KRW 112.2bn (3.6% margin) in 2022 to KRW 212.1bn (6.2%) in 2023, fell back to KRW 163.1bn (4.7%) in 2024, then recovered to KRW 183.9bn (5.2%) in 2025.

Net profit attributable to owners moved from KRW 116.1bn in 2022 to KRW 171.9bn in 2023, KRW 157.3bn in 2024 and KRW 170.1bn in 2025, suggesting that with the top line growing only gradually, input and promotion costs have driven earnings volatility.

The quarterly pattern is sharper: after Q2 2025 revenue of KRW 867.7bn and operating profit of KRW 40.2bn (4.6%) and Q3 2025 of KRW 871.2bn and KRW 54.4bn (6.2%), Q4 2025 margin sank to 3.8% on KRW 882.4bn and KRW 33.4bn, before recovering to KRW 934.0bn and KRW 67.4bn (7.2%) in Q1 2026 and KRW 956.1bn and KRW 59.3bn (6.2%) in Q2 2026.

Q2 2026 net profit attributable to owners was KRW 54.7bn, well above KRW 36.5bn a year earlier. The company said overseas business - exports plus local subsidiaries - drove both revenue growth and margin improvement, with first-half overseas subsidiary sales up 26.8%.

By contrast, separate-basis Q2 revenue, which is domestically centred, rose only 3.3% quarter on quarter to KRW 738.4bn while operating profit fell 32.0% to KRW 32.1bn, which the company attributed to material cost pressure from currency and oil prices.

The balance sheet at end-2025 showed equity of KRW 2,831.2bn against liabilities of KRW 990.9bn, a debt-to-equity ratio of 35.0%, with operating cash flow of KRW 268.7bn indicating steady cash generation relative to earnings.

Industry analysis

Korea's domestic ramyun market has limited room to grow given a stagnant population and soft consumption, while exports are in structural expansion. K-Food Plus exports topped a record USD 7bn in the first half of 2026, with ramyun exports up 27.9% year on year leading the gain. Cost pressure runs the other way.

Middle East instability pushed international naphtha, a packaging feedstock, from USD 568/t in May 2025 to USD 957/t in May 2026, a 68% jump, while the won traded around 1,500 per dollar, raising the cost of imported inputs.

In March 2026 the industry cut selected product prices by up to 14.6% in line with government inflation policy, the first reduction in two years and nine months; costs then rose again and price adjustments followed in the second half.

Whereas Nongshim moved first on prices, Samyang Foods, with more than 80% of sales overseas, said it would focus on export expansion rather than domestic increases, so responses differ within the same sector.

On competitive intensity, Samyang Foods' first-half 2026 consolidated revenue surged 37.2% year on year to KRW 1,484.7bn, keeping it ahead of Nongshim on overseas growth rates.

Still, Japan's Nissin Foods noted in recent results that the rise of Korean products has intensified premium-segment competition, evidence of the broader standing of Korean ramyun. The cycle therefore combines expanding overseas demand with persistent domestic cost pressure.

Outlook

Capacity expansion sits at the centre of the company's disclosed plans. The Busan Noksan export-only plant, whose target slipped from the first half to the second half of 2026 and has now been specified as November completion, is Nongshim's first facility designed from the outset solely for exports.

The company said capacity could be lifted to roughly three times the current level by adding up to eight lines as overseas markets grow, and set out a plan to quadruple European revenue by 2030 on that base.

A Nongshim official said the domestic ramyun market is saturated amid population stagnation, and that the export-dedicated plant will strengthen output while efforts concentrate on Europe and Russia. Longer-term targets include KRW 7trn in revenue by 2030 with overseas sales above 60% of the total.

In the United States, the company has set a goal of moving from second place in instant noodle share to first by 2030.

Near term, how far the August cup-noodle and snack price adjustments feed through, alongside raw and packaging material trends, will shape domestic margins, and commentary suggests results hinge on how quickly overseas sales growth and the new export plant's capacity ramp align.

Note also that early-stage depreciation and fixed costs at a new plant typically land before volume does, making the utilisation ramp the key variable.

Valuation

PER

12.7×

PBR

0.8×

ROE

6.9%

EPS

₩33,790

BPS

₩515,958

Dividend per share

₩6,000

The shares trade below the company's book value per share, placing them at a discount to net assets.

On an earnings basis, the denominator has expanded because the sum of the last four quarters of net profit attributable to owners exceeds the full-year 2025 figure, reflecting the improvement in overseas subsidiary profitability during the first half of 2026.

The company pays a cash dividend every year, but the yield itself is not materially above the domestic market average, so multiples look more sensitive to earnings recovery and overseas growth than to distributions.

For reference, a Mediawatch report dated 10 August 2026 listed target prices of KRW 570,000 from Kyobo Securities, KRW 550,000 from Hanwha Securities, KRW 540,000 from Hana Securities and KRW 530,000 from Yuanta Securities - figures presented by those brokerages, not views of KOSAI.

That said, the quarter-on-quarter decline in separate-basis domestic operating profit and continuing input cost pressure widen the range of plausible earnings outcomes, so realised multiples will depend on second-half costs and the new plant's ramp.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Rising profit contribution from overseas units

According to KB Securities, the overseas subsidiaries' share of operating profit rose to 46% in the second quarter, driven by higher Shin Ramyun sales in the United States and Europe, indicating overseas is gaining weight in profit as well as revenue.

First-half 2026 overseas subsidiary sales rose 26.8% year on year, with the US entity up 10.6% to KRW 287.3bn and China up 21.9%. Regions outside Korea, the United States and China posted first-half revenue of KRW 253.0bn and operating profit of KRW 6.9bn, up 55.6% and 130.0% respectively. The numbers confirm overseas offsetting stalled domestic growth.

Export-only plant eases supply constraints

Domestic capacity stands at around 700m units a year but is expected to rise to 1.2bn once the Busan Noksan plant is completed. Three lines will run first for 500m units annually, with further lines to be added as overseas sales develop.

Europe is cited as the key region driving recent export growth, with local demand rising quickly and a growing need for more supply, so a constraint that has capped growth may loosen. As utilisation climbs, the ability to serve export volumes should improve.

Local US production limits tariff exposure

Nongshim produces and sells locally through two US plants with combined maximum annual output of 1bn units, which leaves it relatively less exposed to US tariff policy than peers that export everything from Korea.

Local production shortens logistics time, allows relatively fresher supply, and serves as a bridgehead into Canada, Mexico and Latin America while reducing tariff and freight burdens. US facilities are reported to run 24 hours a day on average, at higher utilisation than domestic sites. In a volatile trade environment, that supply-chain structure can act as a buffer.

Bear factors

Cost pressure in the domestic business

Separate-basis operating profit for the domestically centred business fell 32.0% quarter on quarter to KRW 32.1bn in Q2 2026, which the company attributed to material costs driven by currency and oil prices. First-half average import prices rose 9.2% year on year to USD 214/t for wheat and USD 1,139/t for palm oil.

Hana Securities estimated that a 10% rise in ancillary material prices adds more than KRW 2bn of cost per month. Quarterly margins therefore hinge on how far overseas gains offset domestic deterioration.

Shrinking domestic market and price policy limits

First-half 2026 domestic entity revenue fell 0.5% year on year to KRW 1,248.7bn, attributed to lower volumes as the domestic market contracts. In the August price adjustment, widely purchased bag-type ramyun was left unchanged, so the increase did not apply across the range.

The government is running discount campaigns to ease perceived inflation, though concerns persist that prolonged cost pressure could keep prices unsettled. As long as the inflation-stabilisation stance holds, room to adjust domestic prices may stay limited.

Slower overseas growth than a key peer

Samyang Foods' first-half 2026 consolidated revenue surged 37.2% year on year to KRW 1,484.7bn. Nongshim's consolidated growth over the same period was slower, and the pattern in which it trailed Buldak-led Samyang Foods on overseas revenue share and operating profit has not been fully reversed.

If the gap in absolute overseas growth persists, investor attention and capital allocation could diverge. The question is how consistently brand expansion takes hold in new regions.

Risk factors

Raw materials and FX

International naphtha, a packaging feedstock, rose 68% from USD 568/t in May 2025 to USD 957/t in May 2026, while the won traded around 1,500 per dollar, lifting the cost of imported inputs.

Petrochemical inputs such as ethylene and packaging materials remain above pre-Middle East-crisis levels, and freight and insurance costs have risen too. Because contract and inventory lags delay pass-through, the timing of relief is hard to pin down. Currency cuts both ways - favourable for translating overseas sales, unfavourable for imported inputs.

New plant ramp delays

The Noksan export-only plant was originally targeted for completion in the first half of 2026, but groundbreaking slipped to May 2025, pushing completion to the second half and later specified as November.

Given that the schedule has already moved once, further slippage in completion, certification or early operation cannot be ruled out. As an export-dedicated site it is to operate with ISO 9001 and FSSC 22000 plus RSPO and halal certification, adding certification timing as a variable. If depreciation lands before volumes, near-term margins could be compressed.

Policy and regulation

In March 2026 ramyun makers cut some product prices by up to 14.6% in line with the government's inflation-stabilisation stance. Episodes in which pricing is not purely at management's discretion may recur.

The government plans to run discount campaigns through the second half, tied to the Chuseok holiday and large consumption events in October and November, so promotional spending is also a consideration.

Abroad, changes in country-level trade and food regulation could affect the split between local production and export volumes.

What to watch next

Mid-November 2026
Q3 2026 consolidated results. Key items are how far the August price adjustments - about 6% on cup noodles and 5.5% on snacks - show up in separate-basis domestic operating profit, and whether the overseas units' reported 46% share of operating profit in Q2 is sustained.
November 2026
Scheduled completion of the Busan Noksan export-only plant. Watch for the completion announcement, the start of the first three lines, certification progress and initial utilisation, which together indicate whether export capacity actually scales toward 1.2bn units a year.
Q4 2026
Trends in wheat, palm oil and naphtha input prices and the won-dollar rate, plus any further pricing action on items left unchanged such as bag-type ramyun. Promotional spending tied to extended government discount campaigns is also worth tracking.
Around February 2027
Disclosure of full-year 2026 results and the dividend decision. Whether the annual operating margin exceeds the 5.2% recorded in 2025, and whether the overseas revenue share rises further from the 40.2% seen in the first half, will show how far the business mix has shifted.
First half of 2027
The revenue contribution of the European and Russian entities and how much Noksan output shows up in actual export data. These provide an early read on progress toward the company's plan to quadruple European revenue by 2030.

Overall view

Nongshim's recent results show overseas and domestic operations moving in opposite directions.

On a consolidated basis the operating margin bottomed at 3.8% in Q4 2025 before recovering to 7.2% in Q1 2026 and 6.2% in Q2 2026, and Q2 2026 revenue of KRW 956.1bn with operating profit of KRW 59.3bn marked a clear year-on-year improvement.

The overseas share of first-half revenue rose to 40.2%, with domestic entity sales down 0.5% while overseas subsidiary sales climbed 26.8%.

By contrast, separate-basis Q2 operating profit for the domestically centred business fell 32.0% quarter on quarter to KRW 32.1bn, showing that inputs and currency continue to weigh on domestic profitability.

The points to watch are how quickly the Busan Noksan export-only plant, due for completion in November, translates into actual utilisation, how far the August price adjustments feed through, and the revenue contribution from newer regions such as Europe and Russia.

The balance sheet looks relatively stable, with a debt-to-equity ratio of 35.0% at end-2025 and operating cash flow of KRW 268.7bn, though new capital spending and cost swings can move near-term earnings. This report is for information purposes only and does not contain any buy or sell recommendation on any security.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

Show 18 more articles and sources

Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.