[Market Focus] Orion Weakens on Underwhelming Preliminary Results

Orion is showing weakness due to underwhelming performance.

As of 9:30 a.m. on July 16, Orion was trading at 115,400 won on the Korea Exchange, down 3,400 won (2.86%) from the previous day. The stock has been experiencing significant declines for two consecutive days.

On the previous day, Orion announced its preliminary results for June. By country, June sales were as follows: Korea recorded 90 billion won, up 5.4% year-on-year; China posted 96.4 billion won, up 3.5%; Vietnam reported 34.1 billion won, up 0.6%; and Russia reached 24.5 billion won, up 49.4%. Operating profit was 13.2 billion won in Korea, up 0.8%; 15.5 billion won in China, roughly flat from the previous year; 4.9 billion won in Vietnam, down 10.9%; and 2.8 billion won in Russia, up 40%. Cho Sanghoon, a researcher at Shinhan Investment & Securities, stated, "Orion's second-quarter sales, calculated by simply summing April to June results, increased by 8.1% year-on-year to 779.5 billion won, while operating profit decreased by 0.2% to 124.5 billion won, which is about 5% below the consensus (the average of securities firms' forecasts)."

Joo Younghoon, a researcher at NH Investment & Securities, commented, "Although the negative impact from competitors' discount promotions on the Chinese subsidiary has eased compared to April and May, sales growth has not yet recovered to the expected level. The Vietnamese subsidiary is also seeing slower sales growth due to the economic slowdown, which is disappointing." He added, "In response, major subsidiaries are simultaneously working to increase the proportion of cost-effective products, so it will be important to monitor the results." He continued, "It is positive that the Russian subsidiary continues to show rapid external growth."