Korea Investment & Securities Co. said on the 24th that Orion is expected to defend against a profitability decline through selling, general and administrative expense cuts despite higher materials and supplies prices. It maintained a "Buy" investment rating and a target price of 150,000 won. Orion's previous session closing price was 106,000 won.
Kang Eun-ji, an analyst at Korea Investment & Securities Co., said, "Although the rise in prices of key materials and supplies such as cocoa and oils and fats increased manufacturing cost pressures, the company defended against a profitability decline through cuts in selling, general and administrative expenses."
She added, "Due to the timing difference of Lunar New Year, the China and Vietnam subsidiaries have limited fourth-quarter sales growth, but the Russia subsidiary, where excess demand persists, will drive sales growth."
Kang forecast Orion's fourth-quarter revenue this year at 920.4 billion won, up 6.8% from a year earlier, and operating profit at 168.6 billion won, up 5.6%.
In the first quarter next year, the China, Vietnam and Russia subsidiaries are expected to lead sales growth. Kang said, "Holiday demand at the China and Vietnam subsidiaries is highly likely to be reflected in the first quarter next year, and sales are expected to continue to increase through expansion of the low-sugar lineup, expansion of store openings for the China subsidiary's snack shops, and strengthening of the bakery category at the Vietnam subsidiary." In addition, the Russia subsidiary's two new lines, which recently began operations, are expected to contribute in earnest to results growth starting in December.
Improvement is also suggested on the cost side. Kang said, "Cocoa prices, which had risen to $12,000 per ton in early 2025 and were the main reason for cost pressures, have recently stabilized in the $5,000 range, so gradual cost improvement is expected from the first half of next year."