[Click eStock] "Orion's 4Q Results Expected to Meet Estimates... Target Price Maintained at 150,000 Won"

On December 24, Korea Investment & Securities stated that Orion's fourth-quarter results are expected to meet market consensus, maintaining its "Buy" investment rating and a target price of 150,000 won.

According to Korea Investment & Securities, Orion is estimated to post fourth-quarter sales of 920.4 billion won and operating profit of 168.6 billion won. This represents a year-on-year increase of 6.8% and 5.6%, respectively, in line with market expectations.

Kang Eunji, a researcher at Korea Investment & Securities, commented, "Although the rise in prices of key raw materials such as cocoa and oils has intensified manufacturing cost pressures, the company managed to defend profitability by reducing selling and administrative expenses."

She added, "While sales growth in the Chinese and Vietnamese subsidiaries will be limited in the fourth quarter due to the timing of the Lunar New Year, the Russian subsidiary, which continues to experience excess demand, is expected to record double-digit sales growth in the fourth quarter, thereby driving consolidated sales growth." The Russian subsidiary's share of annual sales in 2025 is projected to reach 10.2%, marking the first time it will exceed double digits on an annual basis.

Demand related to the holidays for the Chinese and Vietnamese subsidiaries is expected to be reflected in the first quarter of next year. Kang forecasted, "After the Lunar New Year, sales growth will continue through the expansion of the low-sugar product lineup, increased snack bar placements at the Chinese subsidiary, and strengthening of the bakery category at the Vietnamese subsidiary." She also noted, "For the Russian subsidiary, two new production lines that recently began operation are expected to contribute significantly to performance growth starting in December."

Additionally, cost improvements are anticipated next year. The price of cocoa, which surged to as high as $12,000 per ton this year and was a major driver of cost pressures, has recently stabilized around the $5,000 range.

Accordingly, Kang stated, "We are maintaining our Buy rating and a target price of 150,000 won for Orion," adding, "It is also positive that the company continues to maintain higher profitability compared to other companies in the food and beverage sector." She further predicted that Orion's share price will rebound, driven by factors such as the reflection of Lunar New Year demand, recovery in sales growth at the Chinese subsidiary, and improved profitability from lower costs.