IBK Securities on the 26th said Orion posted better-than-expected results even after accounting for the base effect from the timing difference of the holidays, kept its "Buy" investment opinion, and raised its target price to 170,000 won from 160,000 won. Orion's closing price in the previous session was 141,000 won.
IBK Securities estimated Orion's January sales on a simple sum basis by country at 389.1 billion won and operating profit at 82.7 billion won. That is 44.6% and 57.8%, respectively, of IBK Securities' first-quarter estimates (sales 872.5 billion won, operating profit 143.2 billion won). In just one month, it achieved nearly half of the quarterly estimate.
Kim Tae-hyun, an analyst at IBK Securities, said, "While the sales boost from the timing difference of the holidays in China and Vietnam was reflected, companywide profit improvement stood out as cost conditions improved in China and Russia." Kim added, "In Korea, despite sluggish domestic demand, modest growth came from expanding supplies of new products and increased exports to the United States and the United Arab Emirates (UAE)."
By country, January sales and operating profit in China were analyzed at 195.3 billion won and 46.5 billion won, up 37.5% and 90.6%, respectively, from a year earlier. Sales rose on expanded sales of pies, snacks, and jelly, while profit growth was significant due to lower costs for gelatin and potato flakes.
Vietnam recorded sales of 69.1 billion won and operating profit of 13.6 billion won, up 12% and 8.8%, respectively. Although gift set sales increased due to the holiday effect, the operating margin fell 19.7% amid cost pressures from cocoa and oils and fats.
In Russia, despite some order reductions due to worsening weather, sales and operating profit rose 35.4% and 55.6%, respectively, helped by the addition of a new pie line and lower costs for whole milk powder and gelatin.
Kim said, "In Korea, expansion of functional product lines such as protein shakes, in China, reinforcement of spring-season new products and channel-exclusive products for growth, and in Vietnam, the launch of premium rice crackers are expected to spur sales," adding, "In Russia as well, with orders normalized from February, high growth is likely to continue on the back of the expanded pie line."