[Click eStock] "Orion, Record 4Q Performance... Maintains Outlook"

[Asia Economy Reporter Lee Jung-yoon] DB Financial Investment maintained its buy rating and target price of 158,000 KRW for Orion on the 9th, stating that excluding one-time factors, there would be little change in this year's earnings estimates.

Orion's consolidated sales for the fourth quarter of last year increased by 35.9% year-on-year to 851.6 billion KRW, and operating profit rose by 44.2% to 146.7 billion KRW. All subsidiaries in China, Vietnam, and Russia, including Korea, recorded double-digit sales growth, and the operating profit margin was 17.2%, achieving record-high quarterly and annual results.

Jaeheon Cha, a researcher at DB Financial Investment, explained, "Despite a more than 1 percentage point increase in the cost of sales ratio due to rising costs of ingredients such as palm oil and oils, profitability improved continuously through a management focus on profitability, control of selling and administrative expenses, and price increases." He added, "In China and Vietnam, the Lunar New Year had a significant impact, and Russia saw positive effects from the operation of a new factory."

For this year, the Korean subsidiary is expected to achieve stable earnings improvement due to price increases and cost reductions. Vietnam and Russia are projected to continue double-digit sales growth driven by the operation of new factories.

Additionally, China is expected to experience a relative slowdown in growth due to the base effect and intensified competition. However, stable earnings improvement is forecasted to continue this year due to cost reductions, new factory operations, and product price increases.