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Photo = Yonhap news |
[Alpha Biz= Paul Lee] On May 21, LS Securities analyst Park Sung-ho raised the target price for Orion Corp. to ₩160,000, citing expectations of demand recovery in China during the second half of the year. The 'Buy' investment rating was maintained.
Park noted that the weak performance of Orion’s China subsidiary in April was largely due to aggressive discounting by competitors aimed at clearing inventory. However, he emphasized this impact is likely temporary, given the competitors’ profitability constraints. He expects Orion’s shipment volume to normalize by Q3 and Q4.
Orion’s preliminary consolidated sales for April were ₩264.6 billion, up 8.5% year-over-year, while operating profit declined 1.8% to ₩42.6 billion. In China, sales rose 2.6% YoY to ₩106 billion, but operating profit was estimated to have fallen 10.7% to ₩19.1 billion.
Despite short-term headwinds, Park forecasts a stronger performance in the second half, driven by improving consumer demand in China and continued robust growth in Russia. He highlighted the strong momentum in snack shops and e-commerce channels in China, although April revenue in local currency terms saw a 2% decline due to the impact of competitors’ holiday inventory clearance.
In Russia, the ramp-up of two new pie production lines is expected to support growth, and profit margins may improve if the ruble stabilizes, Park added.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
