[Edaily Reporter Kim Kyung-eun] #Orion is driving a marked rebound in its performance in the Chinese market through the expansion of high-growth channels and a strategy focused on limited-edition seasonal products.
Cho Sang-hoon, an analyst at Shinhan Investment Securities, stated, “Although the stock price remained weak due to sluggish revenue growth over the past two years, we expect a recovery in sales growth and the stock price this year following a successful peak season and strengthened product and channel competitiveness.”
Shinhan Investment Securities maintained its “Buy” rating and target price of 160,000 won for #Orion. This represents an upside potential of 19.4% compared to the current stock price (as of the 16th) of 134,000 won.
Revenue growth continued outside of South Korea. In May, year-over-year revenue growth rates by country were as follows: South Korea -2.6%, China +20.8%, Vietnam +13%, and Russia +27.2%. This indicates notable growth in overseas markets excluding South Korea. Amid ongoing cost pressures across most regions—excluding Russia—operating profit varied by region depending on revenue fluctuations and the impact of geopolitical risks. South Korea: -24.1%, China: +23.2%, Vietnam: -3.6%, Russia: +51.4%.
In China, in particular, sales in yuan terms rose by 7% year-over-year. This was largely driven by expanded presence in high-growth channels, including a more than 60% increase in snack bar placements and 11% growth in e-commerce. The launch of channel-specific products and seasonal limited-edition items also contributed to this growth. Despite promotional expenses—including incentives for channel expansion—the cost of goods sold ratio improved by 0.9 percentage points due to lower raw material prices, causing the operating profit margin to return to an upward trend (17.6%, +0.3 percentage points) for the first time in four months.
Researcher Cho emphasized, “We should pay close attention to the company’s proactive strategies to counter the slowdown in consumer spending, such as expanding its presence in high-growth channels and launching channel-specific and seasonal limited-edition products.”
He added, “We expect steady sales growth across all regions, a stronger yuan, and relief from cost pressures,” noting, “If market share increases due to new product launches and channel expansion, and regional expansion—such as the establishment of subsidiaries in India and the U.S. and exports to Eastern Europe, the Middle East, and Africa—becomes a reality, the company could enter the premium segment.”