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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] On the 23rd, Korea Investment & Securities maintained a "Buy" rating and a target price of 130,000 won for Orion (271560), anticipating profitability improvements due to the peak season effect in the fourth quarter.
They analyzed that Orion's third-quarter revenue was 774.6 billion won, reflecting a 1.1% year-on-year increase, while operating profit is projected to decline by 2.2% to 137.5 billion won, aligning with lowered market expectations.
Despite poor performance in South Korea and China, Korea Investment & Securities noted that Orion’s Russian subsidiary recorded a 27.8% year-on-year increase in revenue in local currency terms, effectively countering the decrease in consolidated revenues. They explained that the decline in operating profit was primarily due to increased fixed costs from reduced production levels and one-time expenses related to operational efficiency, which negatively affected the profitability of the Chinese subsidiary.
The firm stated, "Having passed a challenging third quarter, we anticipate product shipments related to the Chinese New Year in the fourth quarter. In South Korea, expanding the number of low-cost SKUs will help confirm revenue growth."
Korea Investment & Securities further commented, "The peak season effect will generate operating leverage, and effective cost management will also improve profitability. If recovery in revenue growth rates is confirmed through the launch of new products and increased supply in South Korea and China, we expect the stock price to rebound."
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
