Orion Continues to Hit Year-Round Lows Consecutively, When Will the Rebound Come?

[Asia Economy Reporter Song Hwajeong] Orion is continuously hitting its lowest price of the year. Foreign investors are persistently selling, and even institutional investors have joined the sell-off, causing the stock price to struggle. With expected performance improvements in the fourth quarter, attention is focused on whether the stock price will rebound.

According to the Korea Exchange on the 18th, Orion's stock price fell to 105,500 KRW during the trading session, setting a new 52-week low. It marked the second consecutive day of hitting the yearly lowest point. Since the beginning of this month, Orion's stock price has dropped by 8.05%.

The decline in Orion's stock price is interpreted as a result of continued selling pressure from major investors. Foreign investors have sold Orion shares for 21 consecutive trading days since the 10th of last month. During this period, the net selling volume by foreign investors reached approximately 41.6 billion KRW. Institutional investors have also joined the sell-off, recording net sales for five consecutive days, selling shares worth 7.8 billion KRW over five days.

Despite posting earnings in line with the third-quarter market consensus, the stock price remains sluggish, likely due to the ongoing cost burden environment. From the fourth quarter, it is expected that the cost burden will ease due to the reflection of price increase effects, and earnings will improve significantly, leading to a potential stock price rebound. Lee Kyungshin, a researcher at Hi Investment & Securities, stated, "Considering the demand expansion that began in the second half of this year, the major hurdle of the negative base effect has already been overcome, confirming an upward trend in operating performance. The short-term excessive decline caused by worsening external variables can be interpreted as a meaningful buying opportunity, given the possibility of further operating performance improvements in the second half of this year and next year."

As overseas subsidiaries normalize, they are expected to contribute to performance improvements. The China subsidiary is expected to see a turnaround in consolidated earnings after the third quarter as sales normalize. Although Vietnam faced difficulties in business activities due to strict regional lockdowns, recent resumption of external activities is expected to restore sales growth rates from the fourth quarter. The Russia subsidiary is projected to achieve high growth by meeting increasing demand through production capacity expansion, alongside improved profitability due to price increases and the ruble's rebound. Jo Mijin, a researcher at NH Investment & Securities, said, "The outlook for earnings growth after the fourth quarter remains valid due to the full-scale effect of price increases in the China and Russia subsidiaries, increased demand during the confectionery peak season such as Christmas, and internal profit structure efficiency improvements."