[Click eStock] Orion, Maintains Target Price Amid New Product Sales Impact in Second Half

[Asia Economy Reporter Lee Seon-ae] Kiwoom Securities stated on the 4th that Orion is expected to improve its performance as the effect of expanding new product sales strengthens toward the second half of the year, maintaining a buy rating and a target price of 170,000 KRW.

Orion's consolidated operating profit for the fourth quarter was 84.6 billion KRW (-14% YoY), falling short of market consensus. This was due to a one-time employee stock compensation cost (stock options) of 16.3 billion KRW reflected in the China subsidiary. However, excluding this, it is generally judged to meet market expectations.

Due to rising raw material prices and local currency depreciation, the cost ratio of overseas subsidiaries is expected to continue rising in the short term. However, the impact of the timing difference of this year's Lunar New Year and sales growth of the China and Vietnam subsidiaries through new product launches in the pie and snack categories are expected to partially offset the burden of rising raw material input costs. In particular, the trend of increasing market share in the Chinese pie market is expected to continue this year through flavor extension and entry into new categories (Yangsan bread).

Park Sang-jun, a researcher at Kiwoom Securities, analyzed, "Orion faces a short-term burden of rising raw material input costs, but as the effect of expanding new product sales strengthens toward the second half of the year, the momentum for performance improvement is expected to gradually recover."

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