[Click eStock] "Orion, Stock Price Recovery Expected from Q4... Target Price Down"

Target Price Adjusted Downward by 5% Compared to Previous Level

Shinhan Investment Corp. forecasted on the 21st that Orion's sales growth rate and stock price recovery will be possible starting from the fourth quarter of this year. The target stock price was lowered from the previous 135,000 KRW to 128,000 KRW, while maintaining a 'Buy' investment rating.

Researcher Jo Sang-hoon of Shinhan Investment Corp. said, "We lowered the target stock price by 5% compared to the previous one, reflecting a slight downward revision of earnings estimates and a decline in valuation within the same industry," adding, "Although the top-line growth in the third quarter will still be sluggish, sales growth rate and stock price recovery are expected from the fourth quarter due to strengthened product and channel competitiveness."

Orion's year-on-year sales growth rates by country in July were recorded as 2.8% in Korea, 4.7% in China, 10.4% in Vietnam, and 30.4% in Russia. Researcher Jo analyzed, "Operating profit showed a favorable trend in all regions except China amid overall easing of cost burdens," and added, "Sales in Chinese yuan decreased by 1.5%, which was due to sales gaps caused by the indirect sales transition through some channel small wholesalers (intermediary distributors)." He further explained, "The transition of small wholesalers has been 100% completed in online and bulk channels, and over 80% completed in discount store channels. We plan gradual sales recovery in the second half of the year by reducing channel gaps and expanding new product distribution."

He expressed the opinion that the stock is in an excessively undervalued phase. Researcher Jo said, "The 12-month forward price-to-earnings ratio (PER) is 9.3 times, indicating an excessively undervalued phase," and added, "With the visibility of market share increase due to new product launches and channel expansion, category expansion (such as nut bars and jerky), and regional expansion (India and US subsidiaries, Russia Plant 3, etc.), it will be possible to enter a premium valuation range."

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