[Click eStock] "Orion, Normalization Trend Expected to Continue"

Sangsangin Securities maintained a Buy rating and a target price of 160,000 KRW for Orion on the 18th, stating that in the second quarter of this year, the negative base effect related to holidays is expected to ease, resulting in moderate growth in sales and operating profit.

Orion's consolidated results for the first quarter of this year recorded sales of 663.8 billion KRW and operating profit of 99.1 billion KRW. These figures were below both the consensus estimates and Sangsangin Securities' projections.

By corporation, Korea saw sales and operating profit increase by 13% and 10% respectively compared to the same period last year, due to steady performance across all channels and categories driven by new product expansion and channel-specific strategies.

China recorded a 13% decrease in sales and a 23% decrease in operating profit. The main cause of this decline was the calendar effect caused by differences in holiday timing. It was explained that a turnaround in sales and operating profit has been observed since March on a monthly basis.

Vietnam saw sales increase by 3%, while operating profit decreased by 12%. In addition to the holiday timing differences similar to China, there was also an impact from consumer slowdown. Furthermore, the burden of manufacturing costs increased due to rising prices of key raw materials, and promotional expenses related to market response increased, leading to an expansion in the selling and administrative expense ratio.

Russia experienced a 59% increase in sales and a 112% increase in operating profit. The expansion of new factory lines has continuously broadened the product portfolio, and the profit margin has significantly improved due to the effects of price increases and leverage from increased production volume.

Kim Hyemi, a researcher at Sangsangin Securities, stated that normalization is expected to continue as the negative base effect eases, but "profitability is likely to slightly decline due to the continued burden of rising costs and aggressive market penetration."

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