[Click eStock] "Orion, 2Q Results Exceed Expectations... Growth to Continue in Second Half"

[Asia Economy Reporter Myung-Hwan Lee] Yuanta Securities announced on the 20th that it maintains a Buy rating and a target price of 150,000 KRW for Orion. The company expects Orion to deliver results that exceed market expectations in the second quarter of this year.

In June, Orion's combined sales reached 206.4 billion KRW, a 30% increase compared to the same period last year, and operating profit rose 75% to 26.9 billion KRW. This marked double-digit growth across all subsidiaries for the second consecutive month. Looking at the sales growth rate by subsidiary compared to the same period last year, Korea recorded 19%, China 25%, Vietnam 52%, and Russia 89%. Despite rising raw material costs, strong top-line growth led to profit strength that surpassed market expectations. Profit growth rates by subsidiary were also significant, with Korea at 18%, China at 242%, Vietnam at 88%, and Russia at 100%.

The second-quarter performance is also expected to exceed market forecasts. Yuanta Securities projects Orion’s consolidated sales for Q2 to increase 25% year-on-year to 630 billion KRW, with operating profit rising 69% to 93.8 billion KRW. This figure surpasses the upwardly revised market forecast of 79.5 billion KRW by about 18%. Despite major city lockdowns in China, the Russia-Ukraine war, and rising raw material costs, strong results are anticipated.

Yuanta Securities praised Orion’s outstanding responsiveness. The company achieved steady top-line growth despite shocks from China and Russia. In a situation of intensifying raw material cost burdens, Orion improved its product mix by expanding low-cost, high-efficiency products, actively responded to raw material sourcing and bidding, executed costs efficiently, and implemented region-specific differentiated price increases. These superior management capabilities led to optimal results, according to Yuanta Securities.

Yuanta Securities forecasts that Orion will achieve 11% growth in consolidated sales and 14% growth in operating profit in the second half of this year. It explained that Orion will continue to pursue a growth-focused strategy in the latter half. In an unfavorable environment, expanding manufacturing leverage through sales growth is seen as the best element for profit defense. The recent downward reversal in major grain prices is expected to ease raw material cost burdens, with effects reflected after a 3 to 6-month lag. Researcher Eun-Jung Park of Yuanta Securities stated, "Growth and management capabilities will continue to drive momentum in the second half."

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