[Click eStock] "Orion, the Only Food Stock to Deliver a Surprise Performance"

On January 12, Hana Securities stated that Orion's Chinese subsidiary, which has struggled with poor performance in the past, is expected to show solid top-line growth this year. The firm assessed that an aggressive value-buying strategy remains valid. The investment opinion is 'Buy,' and the target price is maintained at 155,000 won.

Orion's consolidated sales and operating profit for the fourth quarter of last year are estimated at 909.5 billion won (+5.5% year-on-year) and 171 billion won (+7.1%), respectively. Shim Eunju, a researcher at Hana Securities, commented, "Despite an unfavorable business environment such as fewer working days in the fourth quarter and the timing difference of the Lunar New Year, we expect Orion to deliver solid results." She added, "It is likely to be the only company in the sector to exceed market expectations." By country, top-line growth is estimated at 1.0% for Korea, 3.0% for China, 0.5% for Vietnam, and 40.0% for Russia.

In Korea, increased shipments through new channels such as Daiso and expanded exports to the United States are cited as drivers of sales growth. In Vietnam, exports were somewhat sluggish in October and November last year due to geopolitical issues, but appear to have normalized in December. Shim noted, "In China, the expansion of market share in high-growth channels such as snacks and e-commerce is significant," and added, "Russia is also maintaining solid growth by expanding its Choco Pie lineup."

For this year, Orion's consolidated sales and operating profit are expected to reach 3.582 trillion won (+8.0% year-on-year) and 632 billion won (+12.5%), respectively. In particular, China is expected to benefit from the full effect of the Lunar New Year in the first quarter, while the second quarter is anticipated to see a base effect from last year's intense competition. In the second half, the easing of raw material cost burdens, including those related to Kakao, and the Chinese government's active domestic demand stimulus policies are also expected to serve as positive factors.

Shim emphasized, "The performance of the Chinese subsidiary remains crucial for further share price gains," and stated, "High growth in new channels and profit leverage from lower input costs for raw and subsidiary materials are anticipated."