IBK Securities evaluated on the 20th that ORION's preliminary sales results for July this year were disappointing compared to expectations. While maintaining a 'buy' investment opinion on ORION, IBK Securities lowered the target price from 145,000 won to 140,000 won.
ORION announced that its preliminary sales results for July (simple aggregation by country) were 259.5 billion won in revenue and 41.3 billion won in operating profit. This was 31% and 28% lower than IBK Securities' forecast for ORION's third-quarter (July to September) performance.
Kim Tae-hyun, a researcher at IBK Securities, noted, "The impact of declining consumption continues not only in Korea but also in China and Vietnam, and it is understood that cost burdens remain high."
Looking at the July results by corporation, domestic revenue was 95.1 billion won and operating profit was 15.2 billion won. Thanks to the launch of new products during the summer season and expanded promotions, revenue maintained a slight growth compared to the previous year.
The revenue and operating profit of the Chinese corporation were 98.7 billion won and 16.8 billion won, respectively, which decreased compared to the same period last year. Researcher Kim said, "While it is positive that the discount competition for inventory significantly eased in July after the Lunar New Year, the effects of consumption decline and store closures persisted."
The Vietnamese corporation reported revenue of 38.6 billion won and operating profit of 6.5 billion won. Operating profit decreased by about 11% compared to the same period last year. Researcher Kim explained that this was the result of a combination of local consumer contraction, declining exports, rising materials and supplies prices, increased logistics costs, and exchange rates.
The Russian corporation's operational rate exceeded 120% thanks to strong sales of Choco Pie. Revenue and operating profit were 27.1 billion won and 2.8 billion won, respectively, showing a significant increase compared to the same period last year.
Researcher Kim predicted, "The unfavorable domestic and international business environment is expected to persist for the time being," and noted, "I will slightly lower the performance forecast."