NH Investment & Securities analyzed on the 15th that Orion's increase in profits will begin from the second half of the year to next year due to cost-cutting efforts, normalization of sales, and price hikes.
NH Investment & Securities expects a full-fledged earnings rebound from the third quarter. Investment opinion 'buy' and target stock price remained at 175,000 won, respectively.
"The recovery in the performance of the Chinese subsidiary, which was responsible for the slump in the first half of the year, has begun a comfortable increase phase that will continue until next year," said NH Investment & Securities, in a report.
"We have resolved the burden of rising manufacturing costs on a monthly basis only with efforts to reduce costs.". "In particular, Chinese corporations have reduced the burden of fixed costs due to the reduction of manpower due to the indirectization of TT channels," NH Investment & Securities said. "With the normalization of sales and price increase effect, we expect a full-fledged rebound in performance after the third quarter.".
Regarding the Vietnamese corporation, "Although it is affected by the reproliferation of COVID-19, its business situation is good compared to its competitors through conversion of direct supply and diversification of sales channels," NH Investment & Securities said. "The Russian subsidiary is expected to improve its performance by raising prices by 7% for all items and expanding products starting from October.".
Orion's August earnings turned to positive growth. Researcher Cho said, "The combined sales of each corporation in August were 209.8 billion won and operating profit was 40.2 billion won," and analyzed, "The turnaround of the Chinese subsidiary drove the overall performance improvement.".
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
