[Click eStock] "Orion Expected to Exceed 2Q Earnings Estimates... Stock Undervalued"

[Asia Economy Reporter Lee Jung-yoon] Daishin Securities maintained a buy rating and a target price of 150,000 KRW for Orion on the 15th, stating that the company's operating profit for the second quarter of this year is expected to exceed expectations.

Orion's consolidated sales for the second quarter of this year are analyzed to have increased by 23% year-on-year to 614.6 billion KRW, and operating profit is expected to have risen by 70% to 93.5 billion KRW. The operating profit is projected to surpass Daishin Securities' estimate of 62.6 billion KRW and the consensus estimate of 67.2 billion KRW.

Domestically, sales of convenient meal replacements and health functional foods continue to show double-digit growth compared to the same period last year. In China, expansion of O2O (online-to-offline) channel sales, the effect of distribution system transformation, and market share gains in the snack and pie categories are anticipated. Additionally, in Vietnam, the expansion of new categories such as new products and convenient meal replacements continues, and in Russia, strong sales of pie extension products are positive factors.

Due to rising costs of various raw and subsidiary materials, freight charges, and labor costs, an increase in manufacturing cost ratio appears inevitable. However, the profit leverage effect from increased sales volume and efficient cost management are expected to sustain a profit trend that significantly exceeds market expectations.

Han Yoo-jung, a researcher at Daishin Securities, explained, "We expect continued top-line growth exceeding market growth rates across all subsidiaries in Korea, China, Vietnam, and Russia," adding, "Considering that in some countries and categories, unlike competitors, Orion is expected to accelerate market share expansion while maintaining profitability without raising selling prices, the current stock price level is judged to be significantly undervalued."

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