[Click eStock] "Orion Expected to Post Strong Performance in Q3 as Well"

Hana Financial Investment Issues 'Buy' Rating and 170,000 KRW Target Price... Closing Price on 22nd at 137,000 KRW

Photo by Asia Economy DB

[Asia Economy Reporter Kum Boryeong] Orion is expected to post strong results in the third quarter as well.

According to Hana Financial Investment on the 23rd, Orion's consolidated third-quarter earnings are estimated at 611.3 billion KRW in sales and 115.7 billion KRW in operating profit. These figures represent increases of 15.3% and 13.7%, respectively, compared to the previous year.

The China subsidiary's sales are expected to increase by 22% year-on-year, thanks to synergies with 'Taokenoi' and the effect of new product launches. Eunju Shim, a researcher at Hana Financial Investment, said, "Although the Vietnam subsidiary's base effect from inventory adjustments in the first half of last year has ended, double-digit growth compared to the previous year is expected to continue due to strong sales of rice snacks. The Korean subsidiary is also performing well. Cumulative sales for July and August increased by 4.6% compared to the previous year. Following the upgrade to 'Social Distancing Level 2.5,' overall confectionery demand has increased, and Orion's market share expansion appears to be ongoing."

Hana Financial Investment also forecasts Orion's consolidated sales and operating profit for next year to increase by 7.8% and 10.5%, respectively, compared to the previous year. Researcher Shim stated, "Despite the negative base effect caused by COVID-19 this year, strong sales growth is expected in the first and fourth quarters of next year due to the Lunar New Year effect, market share gains in China, expansion of the 'Taokenoi' lineup, and the establishment of the rice snack market in Vietnam. Improvements in product mix and selling and administrative expenses (logistics, labor, etc.) are also expected to lead to profit improvements compared to the previous year."

Hana Financial Investment has given Orion a 'Buy' rating with a target price of 170,000 KRW. The closing price on the 22nd was 137,000 KRW.