Shinhan Investment Securities on the 18th said Orion is showing standout sales growth in overseas markets such as Vietnam and China. It maintained its "Buy" investment rating and raised the target price to 160,000 won from 140,000 won. Orion's closing price in the previous session was 129,000 won.
Researcher Jo Sang-hun at Shinhan Investment Securities said, "Looking at last month's results by country, domestic sales fell 2.2% year over year, but China, Vietnam, and Russia rose 16.5%, 25.8%, and 43.4%, respectively," and noted, "Despite higher cost burdens, operating profit in Vietnam and Russia increased 48.9% and 77.8%, respectively, while China fell 6.2%."
In particular, China sales increased more than the guidance. Jo said, "Sales in Chinese yuan rose 10% in February and 8% during the Lunar New Year period in November–December last year," adding, "It was stronger than the company's previous guidance, which had forecast a 3%–4% increase in sales."
However, operating margin softened somewhat due to publicity expenses and rising materials and supplies prices. Jo explained, "With higher unit costs for materials and supplies, the cost of goods sold ratio rose by 1.6 percentage points (p), and operating margin is on a decline due to promotion spending to expand channels."
Jo assessed Orion's future sales outlook positively. He said, "If market share rises on the back of new product launches and channel expansion, and regional expansion to India and the United States becomes visible, a share price increase is expected."