China Slowdown, Middle East Risks... Orion Target Price Lowered to 175,000 Won [Click e Stock]

On September 16, Korea Investment & Securities lowered its target price for Orion from 195,000 won to 175,000 won, citing geopolitical uncertainties and a decline in the exchange rate. The investment opinion remains 'Buy.'

Goun Choi, a researcher at Korea Investment & Securities, stated in a report that, “Last month, the aggregate sales rose 9% year-on-year to 301 billion won, while operating profit increased by 5% to 50.5 billion won. In local currency terms, sales in Korea and China grew by 5%, while Russia saw a surge of over 20%, continuing its strong growth. In contrast, sales in Vietnam declined by 7% due to early shipments in July.”

Despite the burden of rising raw material prices, the operating margin improved slightly thanks to the base effect from last year’s one-off recall costs. Choi explained, “China continued double-digit topline growth due to the exchange rate effect, but an overall slowdown in consumption and intensified competition persisted. At the same time, elevated costs from the Middle Eastern war led to an increase of more than 2 percentage points in the cost-to-sales ratio. On the other hand, operating profit in Russia exceeded expectations, increasing by more than 50%, driven by diversified local sourcing and efforts to improve cost efficiency.”

The sharp growth momentum observed early in the year is expected to pause temporarily in the short term. Choi stated, “Given geopolitical uncertainties and the impact of the lower exchange rate, it will be difficult to further raise this year’s profit consensus. However, if external variables stabilize, profitability is expected to recover quickly.”

This content was produced with the assistance of AI translation services.