[Click eStock] "Orion Offsets Cost Pressure with Sales Growth"

On June 18, DS Investment & Securities stated that Orion is expected to see growth in overseas performance thanks to increased exports to neighboring countries, driven by expanded production capacity (CAPA) in Korea, Vietnam, and Russia. The firm maintained its "Buy" investment rating and kept its target price at 160,000 won.

Orion's combined performance for its major subsidiaries in May recorded sales of 269.9 billion won, up 9% year-on-year, and operating profit of 45.5 billion won. By subsidiary, sales growth rates were as follows: Korea +6%, China +3% (local currency basis +0.4%), Vietnam +1% (+1%), and Russia +70% (+47%).

Jang Ji-hye, a researcher at DS Investment & Securities, commented, "Although there was cost pressure from rising prices of key raw materials such as cocoa and shortening, as well as market expenses related to new product launches, the company was able to offset this through increased shipments." She added, "Despite a slowdown in domestic consumption and a decrease in TT (telegraphic transfer) transaction partners, the Korean subsidiary achieved top-line growth through new product launches, including summer season products, and increased exports to the United States."

In China, Orion's top-line growth was hampered by a competitor's holiday inventory clearance promotion that began in April and continued through May. Jang stated, "However, the company achieved double-digit volume growth from November 2024 to February 2025, and as the scale of promotional discounts by competitors is shrinking in June, we expect Orion's top-line growth rate to recover." She added, "In addition to the growing snack shop channel, a recovery in growth rates across other channels is also expected to drive performance growth."

Elsewhere, the Vietnam subsidiary saw a slowdown in top-line growth due to shipment delays for some products. In the Russian market, although the plant utilization rate exceeded 120%, profitability declined due to higher raw material costs and increased market expenses.

Jang assessed, "The company's overseas sales proportion is expected to reach 68% based on 2025 results, maintaining strong competitiveness within the domestic food and beverage sector." She continued, "Although the impact of competitors in China has slowed growth and the prolonged sluggishness in Vietnam is disappointing, domestic growth has recovered, mainly driven by exports to the United States, and Russia continues to post double-digit high growth, offsetting the weak performance in China and Vietnam."