[Click eStock] "Orion, Significant Growth Expected from Q4... Target Price Up"

Target Price Raised by 8% Compared to Previous Level

Hanwha Investment & Securities forecasted on the 20th that Orion will show significant growth starting from the fourth quarter of this year and raised the target stock price from 130,000 KRW to 140,000 KRW. The investment rating was maintained as 'Buy.'

Han Yoo-jung, a researcher at Hanwha Investment & Securities, explained, "The target stock price has been adjusted upward by changing the base point for calculation to 2025," adding, "After restructuring, significant growth is expected from the fourth quarter results."

Orion recorded consolidated sales of 774.9 billion KRW in the third quarter, a 1.1% increase compared to the same period last year, while operating profit decreased by 2.6% to 137.1 billion KRW. The researcher analyzed, "Both sales and profits did not grow compared to the previous year," attributing this to "domestic demand sluggishness in Korea, the shift to indirect sales channels such as large marts, online, and bulk channels in China, and restricted sales activities in Vietnam in September due to typhoon impacts."

October sales grew by 6.2% in Korea, 8.8% in Vietnam, 12.2% in Vietnam, and 34.1% in Russia, respectively. The researcher stated, "Even after removing the effects of currency exchange, sales in China, Vietnam, and Russia grew by 5.0%, 12.4%, and 31.2%, respectively," adding, "In particular, sales in Russia reached a record high monthly sales of 1.7 billion rubles, influenced by the normalization of transactions with major chain X-5 and food specialty channel K&B, as well as the expansion of the product portfolio."

In Korea, growth is expected to turn positive from the third quarter, expanding the number of cost-effective SKUs in line with changed consumption patterns and expanding shelf space in growth channels such as e-commerce and warehouse stores. In China, the Lunar New Year (Chunjeol) will be about 12 days earlier next year than this year, which is expected to increase performance volatility in November-December 2024 and January-February 2025. The researcher noted, "Excluding calendar issues, the shift to indirect sales in large retail (MT) channels in China is mostly complete, so shipment normalization is expected, and except for January, the base effect from the previous year could be prominent, which is positive," adding, "In Russia, high growth is expected due to the normalization of transactions with major discount stores and expansion into high-growth channels. Additional sales growth is anticipated from future line expansions and new or expanded production facilities."