First Read: Nongshim "Q126 beat; overseas sales are growing but not enough..."

Research evidence excerpt

First Read: Nongshim "Q126 beat; overseas sales are growing but not enough..."

on expanding beyond the UK into

12/27E 32,813 33,336

Germany and other markets. Mgmt reiterated its EU Toomba sales target of USD10mn 12/28E 37,843 34,017

and plans to launch a Russia subsidiary in June.

Jaehyung Choi

Q: Has the company's outlook/guidance changed? Analyst

jaehyung.choi@ubs.com

A: In our view, company Q226E and 2026E guidance is generally in-line with consensus.

+82-2-3702 8172

For Q226, mgmt expect domestic sales to remain soft, while overseas sales should

remain solid with c.+25% YoY growth (North America to be slightly better than Q1and Juseong Lee

AnalystChina / Japan / Australia / Vietnam expects double-digit growth) driven by new channel /

juseong.lee@ubs.com

SKU expansion in the US, penetration in the CVS channel in Japan and broader EU +82-2-3702 8106

mainstream channels. Although raw material and logistics costs pressure is expected to

increase from Q226, mgmt still expect YoY profitability improvement supported by Rei Ihara

Analyst

export growth, operating leverage, and better China utilization. Marketing expenses

rei.ihara@ubs.com

may rise modestly, but profitability management is a key focus. +81-3-5208 6227

Q: How would we expect investors to react?

A: We expect investors' initial reaction to remain muted. Despite Q1 beat, US sales, the

key driver for rerating, have yet to show sustained growth momentum. In addition, the

company guided that Q2 profitability could face cost pressure from higher RM and

packaging prices. We continue to prefer Samyang (Buy) over Nongshim (Neutral), given

Samyang's stronger M/S gains and higher growth profile in both the US / EU markets.

Highlights (Wonb) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E