[Click eStock] Smooth Sailing for Orion... Recommended to Buy on Dips

[Asia Economy Reporter Lee Seon-ae] Daishin Securities announced on the 17th that it maintains a buy rating and a target price of 170,000 KRW for Orion.

Although there is a significant base effect burden from March to May 2021 compared to the previous year, it is considered an exceptional phenomenon caused by the surge in demand during the early spread of COVID-19 last year and supply disruptions from competitors. Therefore, rather than worrying about the base effect burden, the focus should be on the trend of market share expansion in key countries.

Orion's consolidated sales by country from January to February 2021 amounted to 432.9 billion KRW (+29% yoy), and operating profit was 80.1 billion KRW (+78% yoy). By country, sales in Korea increased by 3% compared to the same period last year to 130.4 billion KRW (vs. +6% yoy in January-February 2020), and operating profit rose by 20% to 23.7 billion KRW (vs. +18% yoy). Sales in China increased by 54% to 224.0 billion KRW (vs. -20% yoy), and operating profit surged by 273% to 39.5 billion KRW (vs. -65% yoy). Sales in Vietnam rose by 26% to 64.3 billion KRW (vs. +18% yoy), and operating profit increased by 17% to 14.6 billion KRW (vs. +74% yoy). Sales in Russia increased by 10% to 14.2 billion KRW (vs. +36% yoy), and operating profit grew by 5% to 2.3 billion KRW (vs. +144% yoy).

Han Yoo-jung, a researcher at Daishin Securities, stated, "Although the timing difference of the Lunar New Year holidays in China and Vietnam caused related volumes to concentrate in January-February compared to the previous year, driving performance growth, Orion demonstrated remarkable top-line growth in Korea, Vietnam, and Russia despite significant base effects in these countries excluding China," emphasizing, "Buying on dips remains a valid approach."