[Click eStock] "Orion, Continued Profitability Improvement... Attractive Buying Range"

High Profitability Despite Low Valuation
Growth in Korean Market, Stable Performance in Vietnam and Russia
Current Stock Price Accessible Without Burden

NH Investment & Securities analyzed on the 19th that Orion's stock price remains at a low level despite the valuation increase in the food and beverage sector, making it a stock that can be approached without burden. They maintained a 'Buy' rating and a target price of 130,000 KRW. Orion's closing price on the previous trading day was 100,900 KRW.

Joo Young-hoon, a researcher at NH Investment & Securities, stated, "Although sales performance was disappointing due to distribution network issues in some countries and exchange rate effects, profitability improvement continues thanks to a decline in manufacturing cost ratio." He added, "Recently, overseas exports of K-Food have been gaining attention, leading to a rise in valuations in the food and beverage sector. Currently, the company's stock price has a price-to-earnings ratio (PER) of only 9.8 times, falling below the lower bound of its historical valuation band." He further noted, "It is also at a lower level compared to the market average, making it a range that can be approached without burden."

In May, Orion recorded sales of 96.9 billion KRW and operating profit of 17.5 billion KRW in South Korea. By category, snacks grew by +3%, biscuits by +2%, and pies by +15%. The improvement in manufacturing cost ratio by 0.3 percentage points year-on-year, due to the decline in raw material prices such as flour and shortening, is positive.

In China, sales amounted to 99.4 billion KRW with an operating profit of 19.1 billion KRW. Although sales gaps persist due to the shift to indirect sales through intermediaries (Kyeongsosang) in some channels, most of these effects are expected to be resolved in the second half of the year.

In Vietnam, sales reached 35 billion KRW with an operating profit of 6.4 billion KRW. Although the sales growth rate has somewhat slowed, the manufacturing cost ratio improved by 1.1 percentage points due to the decline in raw material prices, which is positive.

In Russia, sales were 17.1 billion KRW with an operating profit of 2.5 billion KRW. Sales decreased by 11% due to the KRW/Ruble exchange rate impact, but sales in local currency terms remained similar to the same period last year.

Researcher Joo concluded, "In summary, despite the valuation increase in the food and beverage sector, the company's stock price remains at a low level, making it a timely opportunity to approach without burden." He added, "It is positive that the trend of profitability improvement is continuing."