[Click eStock] "Orion, Expects Growth of Chinese Subsidiary This Year"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained a buy rating and a target price of 170,000 KRW for Orion on the 16th, based on the expectation of solid sales growth from its Chinese subsidiary this year.

Orion is estimated to record consolidated sales and operating profit of 603.4 billion KRW and 108.3 billion KRW respectively in the first quarter, representing increases of 11.8% and 11.6% compared to the previous year. Sales from the Chinese subsidiary (estimated at 140 billion KRW) are expected to grow by 16% year-on-year, driving improved performance. With the Lunar New Year volume fully reflected, significant monthly sales figures are anticipated. Although concerns about domestic consumption contraction due to the expansion of COVID-19 after the Lunar New Year are growing, strong sales continue centered on new products such as ‘Songsong Cake’ and nut bars.

Sim Eun-joo, a researcher at Hana Financial Investment, said, “Starting from the January earnings announcement, the stock price is expected to show an upward trend from mid-February,” adding, “The current stock price is positioned at the lower end of its historical band, making an aggressive buying strategy effective.”

Orion projected consolidated sales and operating profit growth rates of 10% and 14% respectively for this year compared to the same period last year. These figures slightly exceed market expectations. Despite the high base caused by COVID-19, positive impacts are expected from active new product launches such as mass-produced bread and nut bars, the Lunar New Year effect, and growth of the Chinese subsidiary due to the expansion of the ‘Taokanoi’ product line.

Additionally, Korea, Vietnam, and Russia are also expected to lead solid sales growth by launching new products and various flavors. Furthermore, the company plans to start full-scale production of Choco Pie in India early this month; although sales contribution may be limited, it is predicted to serve as another growth pillar.

Researcher Sim said, “Orion is pursuing mid- to long-term growth through portfolio diversification in Korea and China,” and added, “They have also launched ‘Yongamsu’ to enter the approximately 34 trillion KRW Chinese bottled water market, and synergy from this is expected.”

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