[Click eStock] "F&F, 2021 as the Year of Rebound... Target Price 455,000 Won"

[Asia Economy Reporter Song Hwajeong] Daishin Securities on the 21st initiated a 'Buy' rating and set a target price of 455,000 KRW for F&F, viewing this year as the first year of its resurgence.

F&F is scheduled to relist on the same day after transitioning to a holding company structure. Through this split, F&F Holdings became the surviving entity, and the F&F business company was established as a new entity. Yu Jeonghyeon, a researcher at Daishin Securities, said, "Considering the high growth potential of the business company in domestic and overseas markets and the high valuation of Chinese consumer stocks, the business company is likely to show a strong stock price increase trend in the early stages after relisting."

It is expected that earnings surprises will continue this year. Consumption in the domestic market is rapidly recovering, leading to significant sales growth for Discovery and MLB. Researcher Yu analyzed, "Considering the strong growth of these brands last year, this high growth trend stems from brand competitiveness beyond simple consumption recovery," adding, "Companies like F&F with excellent brand planning capabilities have great growth potential regardless of the domestic apparel consumption market."

In particular, there is an expectation for growth in the Chinese business. Domestic consumption in China is showing a sharp recovery along with the GDP growth rate recovery as the impact of the pandemic gradually eases. Researcher Yu explained, "This is positive for the performance of domestic companies operating brand businesses locally in China," and added, "F&F's stores in China are expected to increase from 112 at the end of Q1 to about 250 by the end of the year, marking a favorable opportunity where the effect of the store expansion strategy can be amplified amid the recovery trend of domestic consumption in China."