“Orion Corporation shares have fallen enough... now it’s time to focus on growth momentum”

[Financial News] LS Securities maintained its Buy rating and 180,000-won price target for Orion Corporation on the 4th, saying the company was at a point where it should focus on growth momentum.
Park Seong-ho, an analyst at LS Securities, said, “High growth, led by the Chinese subsidiary, continues to offset the burden of raw material prices,” adding, “The impact of exchange rates on earnings is also limited, so we expect the company to benefit from a favorable operating environment next year.”
He added, “Traditional distribution channels are shrinking as weak domestic consumption in China persists, but the effect of new placements in the snack-store channel is offsetting this,” and said, “Given the expansion of the snack-store channel itself in China, the benefits of Orion Corporation’s entry into the channel could continue over the medium to long term.”
He also highlighted the growth of the Russian subsidiary. Third-quarter revenue grew by at least 20% in local-currency terms. The outlook is for strong growth to continue next year if the start-up of a new production line in the fourth quarter adds to growth.
Analyst Park said, “The biggest concerns in the July-September results were slowing sales growth in China and a cost burden that was greater than expected, and I believe most of this has been reflected in Orion Corporation’s recent continued share-price decline,” noting, “With the Spring Festival season beginning this month, this is a period when a rebound in growth momentum may be in sight.”
He continued, “Since this is a season when local shipments are concentrated, the snack-store channel’s high growth could come back into focus,” adding, “Last year, too, the market went through a phase of ‘Spring Festival effect → intensifying competition → rebound in growth,’ so it is too early to conclude that growth is on a sustained downward trend this year as well.”
He also said, “There is a clear trend toward stronger shareholder returns in the food and beverage sector,” and noted, “The company paid an interim dividend for the first time this year, and expectations of an increase in its annual dividend remain valid.”

[email protected] Seo Min-ji Reporter