[Click eStock] Orion, Strengthening Fundamentals 'Stock Price at Lower Band'

DS Investment & Securities announced on the 21st that it maintains a Buy rating and a target price of 180,000 KRW for Orion. Recently, Orion's stock price has been weak due to concerns over the slowdown in the Chinese economy, unfavorable exchange rates compared to the previous year, and a base effect caused by the timing of the holiday season in the fourth quarter. However, the company's fundamentals are actually strengthening, and the current stock price is considered attractive as it is at the lower end of the band.

Jang Ji-hye, a researcher at DS Investment & Securities, noted, "Orion's July performance showed high growth in Korea and Russia, and remained steady in China and Vietnam despite sluggish domestic demand." The combined regional results for July recorded sales of 233.6 billion KRW, up 3.5% year-on-year, and operating profit of 38.6 billion KRW, an increase of 35.9%. Sales by each corporation grew by 18.1% in Korea, -2% in China, 1.4% in Vietnam, and 225% in Russia. Although the combined top-line growth was somewhat sluggish due to exchange rate effects, profitability improvement was remarkable. This was mainly due to the operating leverage effect from increased sales volume, reduced cost burdens, and efforts to improve profitability.

Researcher Jang said, "In Korea, manufacturing cost ratio improved due to increased production volume and lower prices of auxiliary materials amid double-digit sales growth across all channels and categories. In China, despite a sluggish domestic economy, sales growth in local currency continued, and profitability improvement was notable. Vietnam also showed performance growth compared to the same month last year through value-for-money products and new product shipments amid a consumption slowdown." She added, "In Russia, although performance in KRW was weak due to unfavorable exchange rates, double-digit sales growth in local currency continued thanks to portfolio expansion and increased demand from clients."

Researcher Jang assessed that Orion will continue steady performance growth by pursuing channel expansion strategies, new product launches, and capacity expansion tailored to each country's situation. In China, the company plans to focus on growth channels by launching new products such as snacks and exclusive products for snack bars, with plans to expand the potato flake production line. In Vietnam, Orion has entered new markets by expanding value-for-money products and SKUs by category, and started shipping dairy beverage products from August. Capacity expansion is also expected through existing factory expansions and new factory construction. In Russia, new pie lines such as Fresh Pie, as well as product portfolio expansion including biscuits and jelly, are planned along with factory line expansions.

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