[Click eStock] "Orion Expected to Recover Growth Rate and Share Price in the Second Half"

On September 17, Shinhan Investment Corp. maintained its "Buy" investment rating and a target price of 140,000 won for Orion, projecting that the company will rebound from its period of underperformance starting in September.

Cho Sanghoon, a researcher at Shinhan Investment Corp., stated, "Orion, which previously led the K-Food sector thanks to its high overseas sales ratio, has experienced sluggish top-line growth and a weak stock price over the past two years. However, from the second half of this year, we expect a recovery in both sales growth and share price as the company strengthens its product and channel competitiveness."

Orion's August performance was considered somewhat disappointing. Year-on-year sales growth rates by country in August were 1.1% in Korea, 4.1% in China, -4.9% in Vietnam, and 37.3% in Russia. Operating profit changed by -23.0% in Korea, 12.9% in China, -15.6% in Vietnam, and 31.3% in Russia. Researcher Cho explained, "In Korea, similar to July, costs related to product recalls and inventory disposal (5 billion won) were reflected, but excluding these, sales grew by 4% and operating profit by 9.9%. In China, sales in yuan terms grew by 1.7%. While hypermarkets contracted and traditional trade (TT) channel closures continued due to weak domestic consumption, high-growth channels such as convenience stores, snack shops, and e-commerce maintained their upward momentum. Efforts to improve SG&A efficiency led to a second consecutive month of operating margin growth." He added, "It is important to note Orion's proactive strategies to counter sluggish consumption, such as expanding into high-growth channels, launching channel-specific and seasonal limited products in the second half of the year."

The analysis suggests that Orion is currently in an excessively undervalued phase. Researcher Cho commented, "With a 2026 forward price-to-earnings ratio (PER) of 10 times, Orion is excessively undervalued. If the company achieves higher market share through new product launches and channel expansion, and if regional expansion becomes more visible, it could enter a premium valuation range."

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