April 27, 2024

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[THE INVESTOR] Orion’s brands are aging and sales of its products are recovering slower than expected, said Samsung Securities on Sept. 14, lowering the target price to 145,000 won (US$129.45) from 160,000 won while maintaining a “buy” recommendation.

Competition is heightening in the snack category and revenue is not picking up fast enough. It is planning to expand brands by introducing more flavors and to offer relatively lower prices than its rivals, but will need more time. Revenue in the third quarter will stand at 521.5 billion won and operating profit will fall 5.3 percent on-year to 74.5 billion won, below market consensus, said analyst Cho Sang-hun.

Sluggish sales in China is one of the main reasons for the slow earnings. Revenue and operating profit from Chinese operations will decline 8 percent and 14.8 percent, respectively, from last year, when its revenue and operating profit rose as it cleared inventories and cut back on personnel costs, explained the analyst. 

By Hwang You-mee (glamazon@heraldcorp.com)