[Click eStock] "Orion, Q3 Expected to Meet Expectations"

[Asia Economy Reporter Oh Ju-yeon] Daishin Securities maintained its investment opinion of 'Market Perform' and a target price of 160,000 KRW for Orion on the 17th, stating that the company's third-quarter earnings are expected to meet previous estimates.

According to Daishin Securities, Orion's consolidated sales for the third quarter of this year are expected to reach 594.3 billion KRW, and operating profit is forecasted at 108.6 billion KRW, representing increases of 12% and 7% respectively compared to the same period last year. This is in line with the market consensus of 111.8 billion KRW and Daishin Securities' previous operating profit estimate of 109.2 billion KRW.

Researcher Han Yoo-jung emphasized, "We expect market growth rates to be exceeded across all countries including Korea, China, Vietnam, and Russia," adding, "In particular, strong sales of pie extension products in Russia will lead to a 15% increase in sales and a 3 percentage point rise in operating profit margin compared to the same period last year, resulting in both top-line growth and improved profitability." She continued, "We judge this growth to be sustainable through the end of the year, and thereafter, expansion of the biscuit lineup will drive growth."

However, due to the impact of new beverage businesses in Korea and the launch of new snack and nut products in China, the cost ratio for the third quarter is expected to rise by 2 percentage points and 1 percentage point respectively compared to the same period last year, leading to a slight 1 percentage point decline in consolidated operating profit margin.

Researcher Han stated, "However, this is a growing pain for tomorrow," analyzing, "It is a phase of transformation into a comprehensive food company through expanding the confectionery product lineup in Russia, where pie was the main product, launching new snack products in Vietnam considering local preferences, and expanding categories into beverages and health foods beyond confectionery businesses in Korea and China."

She added, "Although short-term profitability deterioration due to initial investment costs is inevitable, in the mid- to long-term, securing portfolio diversity and synergy with existing business units are expected."

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