[Click eStock] "FILA Holdings, Increased Valuation Appeal with Earnings Improvement Next Year"

[Asia Economy Reporter Eunmo Koo] Hi Investment & Securities analyzed that FILA Holdings' performance improvement next year will drive a valuation (stock price level relative to performance) increase.

Lee Sangheon, a researcher at Hi Investment & Securities, stated in a report on the 14th, "Key business target countries such as South Korea, China, the United States, and Europe experienced poor performance in the first half of this year due to the impact of COVID-19." He estimated that FILA Holdings' consolidated sales this year will decrease by 10.0% from last year to 3.1061 trillion KRW, and operating profit will decline by 23.2% to 361.3 billion KRW. However, he added that in the third quarter of this year, outdoor sports golf became highly popular in North America and Korea due to the spread of COVID-19, significantly improving the performance of its subsidiary Acushnet, somewhat mitigating FILA Holdings' poor performance.

However, next year is expected to see a recovery in performance due to the base effect as the impact of COVID-19 subsides. Hi Investment & Securities forecasts that FILA Holdings' consolidated sales next year will increase by 7.3% from this year to 3.3323 trillion KRW, and operating profit will improve by 21.0% to 437.0 billion KRW.

The researcher said, "In an environment where China and the golf business are recovering, consumption recovery in the U.S. next year could increase the possibility of the company's performance improvement." He also predicted, "Acushnet is expected to improve its performance next year with new product launches, and such performance improvements will drive FILA Holdings' valuation increase in the future."

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