[Click eStock] "Orion, Strong Momentum for Earnings Improvement"

[Asia Economy Reporter Hwang Yoon-joo] Kiwoom Securities evaluated Orion on the 30th, stating that sales volume and operating profit have been steadily growing, supported by market share expansion, strong performance of new products, and local currency appreciation. Accordingly, they maintained a 'Buy' investment rating and a target price of 140,000 KRW.

Park Sang-jun, a researcher at Kiwoom Securities, stated, "We expect consolidated sales in the third quarter to increase by 18% year-on-year to 736 billion KRW, and operating profit to rise by 4% to 118.5 billion KRW."

Researcher Park analyzed, "Korean sales are expected to increase by 14%, driven by market share expansion in pies and the growth of convenient meal replacements and health functional categories."

Regarding sales in China, he estimated, "Despite a low base effect in pie demand, sales are expected to increase by 5%, supported by the appreciation of the yuan and a rebound in snack market share. Sales in Vietnam and Russia are also expected to grow by 47% and 99%, respectively, due to local currency appreciation, strong new products, and expansion of local distributors."

Operating profit is expected to increase by 4%, "despite the burden of rising raw material costs due to minimized price increases and a decrease in sales volume at the Chinese subsidiary, thanks to high sales growth at the Korean, Vietnamese, and Russian subsidiaries," he forecasted.

Researcher Park anticipated strong momentum for performance improvement in the fourth quarter. He said, "Driven by early Lunar New Year consumption next year, price increases at the Korean subsidiary, and the effect of local currency appreciation, the company-wide performance improvement momentum will be strong," adding, "The estimated operating profit for the fourth quarter is 132 billion KRW."

He emphasized, "In the mid-term, the expansion of pie and snack market shares in Korea, the rebound of snack market share in China, high growth in the Vietnamese confectionery market, and the expansion of snack and biscuit lineups in Russia are positive for sales growth. In particular, since the growth trend centered on sales volume continues compared to competitors, there is a high possibility that operating leverage effects will significantly appear in the future as costs stabilize."