[Click eStock] "Orion, Performance Improvement Visible... Time to Buy at Low Price"

Hana Securities maintained a buy rating on Orion on the 14th, stating that the company's performance improvement trend is becoming visible, and set a target price of 150,000 KRW. They also mentioned that it is a good time to buy at a low price.

Sim Eun-joo, a researcher at Hana Securities, explained, "Chinese local companies presented a positive outlook for the second half of the year through their first-half earnings announcements. Although the first half saw limited volume growth compared to expectations due to the timing difference of the Lunar New Year and a slowdown in consumer spending, a gradual volume recovery is expected in the second half." She added, "While concerns about the consumer economy remain, it is positive that local companies are placing weight on the possibility of recovery in the second half."

She continued, "The improvement in profit and loss in the first half compared to the same period last year was solid, attributed to the easing of cost burdens," and noted, "This trend is continuing into the third quarter."

There is also an analysis that Orion's profit improvement is becoming visible. Factors expected to drive growth from the second half of this year through next year include the gradual recovery of domestic consumption in China and Vietnam, the visible easing of cost burdens, and the effect of additional production capacity (CAPA) expansion in Russia. Additionally, a base effect due to the timing difference of the Lunar New Year is expected next year, and India is also anticipated to contribute sales of around 100 billion KRW, which is positive.

Next year, consolidated sales and operating profit are estimated to increase by 7.6% and 13.1%, respectively, compared to the previous year. Growth rates by country in local currency terms are estimated at 8.0% for South Korea, 5.6% for China, 11.1% for Vietnam, and 25.0% for Russia.

Researcher Sim said, "In South Korea, sales and operating margins are expected to continue improving due to reduced discounts from eased competition and improved channel mix," and added, "As mentioned, China can keep the possibility of gradual consumer recovery open, and with the Lunar New Year effect properly reflected next year, it is judged that about 5% top-line growth can be achieved."

She also said, "In Vietnam, Orion is expanding its footprint into the beverage market through a partnership with Thailand's 'Dutch Mill' and has started selling the traditional Vietnamese pastry 'Wolbyeong' (Mooncake)," adding, "Considering the many requests from local Vietnamese consumers for the launch of 'Orion Wolbyeong,' early market acceptance seems highly likely."

There is also an expectation of a base effect from the Lunar New Year next year in Vietnam. In Russia, following the expansion of one Choco Pie production line in the third quarter, there are plans to secure additional lines in the second half. With the new factory's operating rate rising rapidly, margins are expected to improve toward the end of the year.

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