[Click eStock] "Orion, Expanding Global Market Dominance... Limited Impact from COVID-19"

[Asia Economy Reporter Park Jihwan] Hi Investment & Securities on the 7th maintained a 'Buy' rating and set a target price of 160,000 KRW for Orion, stating that despite the deteriorating business environment caused by the novel coronavirus infection (COVID-19), the company is expanding its global market dominance.

Lee Kyungshin, a researcher at Hi Investment & Securities, analyzed, "Orion's first-quarter sales and operating profit were 539.8 billion KRW and 97 billion KRW respectively, demonstrating remarkable growth in operating performance despite some deferral of the Lunar New Year effect from the fourth quarter of last year, due to increased scale and profit improvement across all regions including China."

It was evaluated that the growth in scale, centered on snacks, was more prominent than the initially expected negative impacts related to the Lunar New Year effect and partial suspension of factory operations due to COVID-19. The positive trend continues with a high pace of channel and production preemption compared to peers in the same industry.

Researcher Lee explained, "Growth and market share improvement in the domestic market are also steady, and with the addition of new products such as pies, biscuits, and snacks, the first quarter showed a 7.2% increase in scale and a 29.0% improvement in profits compared to the same period last year."

The Vietnam market also achieved 23.9% growth in scale and 98.4% growth in profits due to strong performance of existing products and the addition of categories such as rice crackers and mass-produced bread. In Russia, growth in the main category of pies continues, and the company has recently succeeded in product diversification by adding categories such as biscuits.

Lee emphasized, "Not only is the recovery from COVID-19 faster than expected, but growth beyond that is continuing," adding, "The attractiveness of valuation is increasing through improved operating performance, and the stock price is likely to continue an upward trend through a virtuous cycle including normalization of valuation, which has been discounted by more than 20% compared to peers since the THAAD issue in 2017."

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