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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Minyoung] Shinhan Investment Corp. anticipates that Orion will achieve its expected performance for the second quarter of this year. The firm maintains a 'Buy' rating and a target price of 135,000 KRW.
Shinhan Investment Corp. stated, "For the second quarter of this year, we expect sales to increase by 0.4% year-on-year to 721 billion KRW, and operating profit to rise by 6.6% to 124.8 billion KRW." They explained, "Sales in China are projected to decline by 1% in yuan terms, and some channels have transitioned to indirect sales, resulting in a sales gap."
However, the operating profit margin is expected to increase by 0.9 percentage points (p) year-on-year due to lower raw material costs and reduced sales discounts. In the second half, Orion plans to gradually increase sales by filling channel gaps and expanding the distribution of new products.
Orion has been left out of the K-food rally cycle due to its lower sales growth rate and investments in the biotech sector unrelated to its core business. To address this, it needs to strengthen its product and channel competitiveness.
Shinhan Investment Corp. commented, "The current valuation is excessively undervalued at a 12-month forward price-to-earnings ratio (PER) of 8.8 times," and explained, "The target price was calculated with a 20% discount to the global industry average."
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
