[Click eStock] Orion, Growth Exceeding Expectations... April China Sales Up 47% YoY

High Growth Centered on Domestic and China Markets... Future Growth Drivers Also 'Sufficient'

[Asia Economy Reporter Minwoo Lee] Orion is continuing a steeper-than-expected growth trend centered on South Korea and China. As the novel coronavirus disease (COVID-19) somewhat subsides, it is forecasted that sales will expand due to the continued preference for home-centered food consumption.

On the 27th, Hi Investment & Securities predicted that Orion would achieve sales of 484.4 billion KRW and an operating profit of 74.5 billion KRW in the second quarter of this year. These figures represent increases of 10.3% and 47.8%, respectively, compared to the same period last year. This is due to the steep growth trend observed mainly in China and South Korea since the earnings announcement in March. In fact, last month, sales in China alone reached 95.7 billion KRW, a 47.2% increase compared to the same period last year. In the same month, domestic corporate sales and operating profit increased by 6.7% and 36.7%, respectively, compared to the same month last year.

Researcher Kyungshin Lee of Hi Investment & Securities explained, "Considering the external growth centered on snacks, the current trend of home-centered food consumption has been maintained, which can be interpreted as the COVID-19 issue somewhat calming down. The effect of new products in the pie and snack sectors is also an element that can continue to drive sales expansion in the future."

Orion is also performing well in other regions. Sales in Vietnam grew by more than 30% as product lines expanded to include rice crackers and mass-produced bread, in addition to snacks and pies. In Russia, growth continues in the main product category of pies, and product diversification is underway with the recent addition of biscuits.

Based on these factors, Hi Investment & Securities has issued a 'Buy' investment opinion on Orion and raised the target stock price by about 3% to 170,000 KRW. The closing price the previous day was 134,000 KRW. Researcher Lee stated, "Not only is the recovery from COVID-19 faster than expected, but growth beyond that is becoming visible. Considering the additional expectations for mid- to long-term improvement in corporate strength due to market position expansion, simple comparisons with previous stock price levels are meaningless, and the stock price is expected to steadily rise."