On the 26th, IBK Investment & Securities maintained a target price of 21,000 KRW and a 'Buy' rating on Orion Holdings, citing an expected increase in dividend income due to the new dividend policy of its affiliates.
Researcher Nam Seong-hyun stated, "Orion Confectionery plans to increase its dividend payout ratio (controlling shareholder basis) to over 20% for the next three years on a consolidated financial statement basis," adding, "Considering the dividend payout ratios for the past three years (2021?2023) were 11.5%, 9.6%, and 13.1% respectively, this represents an increase of about 80%."
Nam explained, "The existing dividend policy was structured based on free cash flow, where dividends are paid after deducting investment costs, which may have been somewhat disappointing to investors," and added, "However, the newly announced dividend policy reflects a commitment to return profits to shareholders."
He forecasted, "With the establishment of this dividend policy, Orion Holdings' standalone operating performance is expected to improve significantly," and "accordingly, an increase in Orion Holdings' dividend yield is also anticipated."
He further elaborated, "Orion Holdings' dividend income for the first quarter of this year is estimated to have increased by 31.4% year-on-year to approximately 18.5 billion KRW," and "considering the continuous growth in Orion Confectionery's performance and the expanded dividend payout ratio, dividend income for the first quarter of 2025 is projected to rise by 79.7% year-on-year to about 33.3 billion KRW."
He added, "The company paid 750 KRW per share last year, and considering the expected increase in dividend resources, the dividend per share is estimated to be higher in the future."
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