[Featured Stock] F&F Rises 4% on Strong Profit Resilience and Positive Market Outlook

[Asia Economy Reporter Lee Seon-ae] F&F is showing a strong rise of over 4%, buoyed by favorable reviews from the securities industry.

As of 10:15 AM on the 4th, F&F is trading at 143,000 KRW, up 5,500 KRW (4%) compared to the previous trading day.

On this day, the securities industry forecasted that F&F would achieve strong performance due to the recovery of its business in China. They also maintained it as the top preferred stock within the sector.

Hanuri, a researcher at Meritz Securities, stated, "Stock prices ultimately reflect performance," adding, "We believe that not only F&F's relative sales growth but also its absolute profit scale will reach the highest level among domestic consumer goods." While all of F&F's brands continue their high-growth trend, local sales in China are expected to hit an all-time high. It is projected that sales in Q3 2022 will reach 424.7 billion KRW, operating profit 125.6 billion KRW, and net profit 92.8 billion KRW. These represent increases of 29.1%, 31.1%, and 30.5%, respectively, compared to the previous year.

Researcher Han noted, "Domestic MLB is expected to deliver strong results based on brand power," and added, "China MLB will set a new record with sales of 174.7 billion KRW, driven by new store openings and strong performance at existing stores boosting offline sales, along with an increase in the number of SKUs enhancing online results." He projected, "In 2022, China MLB's retail sales will reach 1.364 trillion KRW, surpassing LG Household & Health Care (917.1 billion KRW) and Amorepacific (906.8 billion KRW) within three years of market entry," and forecasted, "China sales in 2023 will reach 1.0315 trillion KRW."

He continued, "Operating profit in 2023 is expected to be 837.9 billion KRW, twice that of Amore (401.4 billion KRW)," and emphasized, "Operating profit in 2024 will surpass 1 trillion KRW, challenging LG Household & Health Care (1.1706 trillion KRW), but currently, F&F's market capitalization is 5.27 trillion KRW, significantly lower than Amorepacific (5.97 trillion KRW) and LG Household & Health Care (9.89 trillion KRW)."

Park Ha-kyung, a researcher at Korea Investment & Securities, also analyzed, "With steady growth in the domestic market and entering the peak season for the China business, F&F will demonstrate high growth again," and maintained it as the top preferred stock within the sector.