[Click eStock] "F&F, Duty-Free and China Business Booming... Target Price Up"

[Asia Economy Reporter Song Hwajeong] NH Investment & Securities forecasted on the 8th that F&F's first-quarter performance will exceed expectations due to strong duty-free and China business, raising the target stock price from 164,000 KRW to 171,000 KRW. The investment opinion was maintained as 'Buy.'

Lee Ji-young, a researcher at NH Investment & Securities, explained, "Considering the rapid recovery of duty-free stores and the strong performance of the China business, we raised the earnings per share (EPS) for this year and next year by 3.7% and 3.8%, respectively, and increased the target stock price by 4%."

F&F's duty-free sales are showing a steep recovery. Recently, as consumption in China has diversified, there has been an increase in small and medium-sized resellers who broadly purchase various items such as fashion, accessories, and miscellaneous goods, among whom F&F's MLB is the most popular brand. Sales in China are also progressing smoothly. The number of agency stores is estimated to exceed 100 in the first quarter of this year from 71 at the end of last year, and it is expected to reach 250 to 300 stores by the end of the year. The researcher said, "In the mid to long term, it will be possible to open up to 1,000 stores," adding, "Discovery will continue steady growth through the spread of outdoor lifestyle, category expansion within the brand, and consistent store openings."

F&F's first-quarter performance is expected to significantly exceed market expectations. NH Investment & Securities projected that F&F's consolidated first-quarter sales and operating profit will record 234.7 billion KRW and 31.7 billion KRW, respectively. These figures represent increases of 41% and 83% compared to the same period last year. The researcher explained, "Both sales and profits will greatly surpass market expectations," adding, "MLB will benefit from the overall consumption recovery, with duty-free sales increasing by 60% year-on-year to 53.8 billion KRW, and China business sales rising by 576% to 42.6 billion KRW, showing remarkable growth."