Kiwoom Securities maintained its investment opinion 'buy' and target price of 160,000 won for Orion on the 20th.
The move is based on the judgment that momentum for performance improvement is expected to strengthen as rising costs in four countries, China, South Korea, Vietnam and Russia, have eased.
Orion's combined sales of the four countries in the third quarter are expected to reach 629.7 billion won and operating profit is 115.5 billion won, up 5% and 6%, respectively, from a year earlier. Based on the sum of the four countries, sales in September were 228 billion won and operating profit was 46 billion won, up 9% and 10% over the same period.
Kiwoom Securities analyzed, "The operating profit ratio also rose 3.4 percentage points year-on-year due to the effect of price hikes, which served as a major factor above market expectations.".
Orion's consolidated sales in the fourth quarter are expected to grow 13% and 40% year-on-year to KRW 651.1 billion and operating profit of KRW 118.9 billion.
This is because while sales growth centered on the effects of new products continues, Chinese and Vietnamese corporations are expected to have positive effects due to differences in the timing of the Lunar New Year.
In addition, Vietnam is expected to recover sales due to eased regional blockades, and reflecting the effect of price hikes by Chinese and Russian subsidiaries is expected to begin in earnest.
Sales of cumulative companies in the second and third quarters of this year increased 17% compared to the same period in 2019, when COVIDO 19 was not affected. In the case of Chinese corporations, sales increased 11% over the same period in 2019.
Kiwoom Securities added, "It is expected to show relatively rapid profit improvement in the industry as sales growth and selling price increase effects are reflected at the same time.".
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
