[Click eStock] "Orion, Noble Growth Despite Adverse Conditions"

Korea Investment & Securities Report

[Asia Economy Reporter Minji Lee] Korea Investment & Securities maintained a buy rating and a target price of 175,000 KRW for Orion on the 18th.

Orion's consolidated corporate sales in October amounted to 192.1 billion KRW, a 14% increase compared to last year. Operating profit recorded 38.1 billion KRW, growing by 30%. Despite rising raw material costs such as sugar and flour and unfavorable exchange rates, operating profit significantly increased from last year due to operating leverage effects and management of selling and administrative expenses. The operating profit margin rose by 2.4 percentage points during the same period, reaching 19.8%.

Researcher Jeong-eun Lee from Korea Investment & Securities explained, “For items requiring market dominance expansion, strategic promotions were launched, while for items needing profit protection, costs were controlled by reducing events.”

The pie market in China decreased by 4% year-to-date as of September compared to last year. The snack market remained at a similar level to last year except for potato chips, which grew by 3% compared to the same period last year.

On the other hand, Orion's cumulative pie sales in China for the third quarter increased by 11%, and snack sales rose by 32%, showing significantly superior growth compared to the market. In October as well, snack sales grew by 8% and pie sales by 35% compared to the same period last year, demonstrating high growth. Market share continues to soar. Pie market share reached 40%, and snack market share approached the pre-THAAD peak of around 11%.

However, the stock price has fallen about 28% from this year's peak. Orion's market dominance remains solid, and next year is expected to show significant growth with the start of operations at the India factory, entry into new categories of mass-produced bread in China, and expansion of the biscuit portfolio in Russia.

Researcher Jeong-eun Lee stated, “Although the stock price is excessively adjusted due to concerns about the base effect next year, there are ample opportunities to overcome performance burdens,” adding, “We consider this a buying opportunity at the bottom.”

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