Kiwoom Securities said on the 18th that ORION's share price momentum (upside potential) is likely to strengthen toward the end of the year. It maintained a Buy rating and a target price of 150,000 won. ORION's previous closing price was 108,000 won.
Kiwoom Securities said that for ORION, while overall cost increases and higher promotional spending make the earnings improvement momentum weak in the second half of this year, the company-wide earnings improvement momentum is likely to strengthen starting in the first quarter next year as the cost ratio normalizes, fundamentals improve, and the late Lunar New Year has an effect.
Park Sang-jun, an analyst at Kiwoom Securities, said, "ORION has expanded promotional spending at its China and Vietnam subsidiaries this year despite overall cost pressures," and added, "Since cocoa prices have recently stabilized, there is a high possibility that the company-wide cost ratio will show stability starting in the first quarter next year."
He also projected that the profit contribution of new products and growth channels at the China subsidiary, where investments were heavy this year, could expand. For the first quarter next year, sales growth momentum could increase due to the late Lunar New Year in China, so ORION's share price momentum is expected to strengthen toward the end of the year.
Meanwhile, ORION's combined results by country for August were 276.8 billion won in revenue and 48 billion won in operating profit. Park said, "Excluding a one-off expense of 5 billion won related to the recall of Cham Bungeoppang by the Korea subsidiary, the actual operating profit is judged to have increased 8% from a year earlier."