[Click eStock] "Orion, Continued Earnings Growth in Second Half Despite Cost Burden in First Half"

Hyundai Motor Securities maintained a buy rating and a target price of 170,000 KRW for Orion on the 21st, expecting the company to continue its earnings growth in the second half of this year.

Orion's provisional consolidated sales by corporation last month amounted to 253.1 billion KRW, up 14.9% year-on-year, and operating profit increased by 22.6% to 44.5 billion KRW. Heeji Ha, a researcher at Hyundai Motor Securities, explained, "Despite a challenging business environment, volume growth across all corporations continued," adding, "Although cost burdens persisted in the first half, earnings growth is expected to continue in the second half due to reduced cost pressures and aggressive new product launches and portfolio expansion strategies by all corporations in Q2 and Q3."

For Orion's domestic corporation, sales increased by 21.3% and operating profit by 25.8% compared to the same period last year. Last month, a double-digit increase in shipments across all channels continued, and the effect of price increases led to improvements in both scale and performance. Although burdens from flour and potatoes were evident until the first half, it is expected that cost pressure will be minimized in the second half through integrated purchasing and expanded bidding for raw materials such as sugar and starch, which are expected to see price increases. Furthermore, stable profitability improvement is anticipated as shipment growth and price increase effects are expected from new snack product launches and shelf share expansion strategies in the second half.

The China corporation saw sales increase by 13.1% and operating profit by 29.1%, attributed to improved consumption flows following China's reopening (resumption of economic activities), normalizing shipments in local small and medium-sized stores, which led to such growth. The Vietnam corporation recorded sales growth of 8.4% and operating profit growth of 7.4%, while the Russia corporation also increased by 8.9% and 3.3%, respectively.

Researcher Ha added, "Overall, despite a difficult business environment, shipment growth continued in the domestic and Russian corporations," and "With high growth driven by improved consumption in China and the expected gradual normalization of shipments in the Vietnam corporation from May, an upward trend in the stock price is anticipated."

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