[Click eStock] "Orion Exceeds Q4 Earnings Expectations"

[Asia Economy Reporter Park Jihwan] Daishin Securities maintained its 'Buy' rating and target price of 130,000 KRW for Orion on the 6th, citing "4th quarter results exceeding expectations."

Han Yujeong, a researcher at Daishin Securities, explained, "Orion's consolidated sales in the 4th quarter of last year increased by 13% year-on-year to 556.4 billion KRW, and operating profit rose by 39% to 97.7 billion KRW, in line with the consensus operating profit of 95.5 billion KRW."

The main reason for this strong performance was that despite stagnation in the domestic confectionery market, sales growth rates of snacks, biscuits, and pies exceeded the market growth rate, resulting in sales and operating profit increasing by 6% and 26% respectively compared to the previous year. Additionally, the reflection of demand ahead of the Chinese Lunar New Year this year and strong sales of new products such as Taokenoi had a significant impact. Balanced sales growth in Vietnam and Russia also played a role.

However, there are challenges to overcome. Due to the impact of the novel coronavirus infection in China, concerns about production and logistics disruptions in February have emerged. In terms of production, it is expected that the current local inventory can still respond, but due to logistics disruptions in key regions, a conservative approach to February performance is necessary at this time.

Researcher Han said, "The possibility of a prolonged sales gap in China is low, and the period immediately after the Lunar New Year in February is a seasonal low season with the previous year's base not being a significant burden," adding, "if category expansion in China and Vietnam proceeds smoothly after the impact of the novel coronavirus subsides, there is a high possibility of upward revision of 2020 estimates."

This content was produced with the assistance of AI translation services.