F&F, Rising Expectations Amid Consecutive High Price Runs

[Asia Economy Reporter Song Hwajeong] F&F continues to break record highs day after day even amid a bear market. Sustained foreign buying driven by earnings expectations appears to be the driving force behind the stock price increase.

According to the Korea Exchange on the 16th, F&F has risen more than 20% since the beginning of this month. During the same period, the KOSPI fell 2.61%. F&F has continuously set new all-time highs this month. On the 14th, the stock price rose intraday to 894,000 won, bringing it close to surpassing 900,000 won.

The reason F&F was able to rise sharply even in a bear market is due to foreign investors. Foreign investors, who led the bear market by massive selling in the domestic stock market this month, have shown buying momentum for F&F, purchasing net for seven consecutive trading days recently, with buying activity on all but one day this month.

Earnings expectations are supporting the stock price rise. F&F is expected to have recorded its highest quarterly performance in the third quarter. Meritz Securities forecast that F&F’s third-quarter sales will increase 89.9% year-on-year to 303.2 billion won, and operating profit will rise 505.6% to 76.4 billion won, achieving the highest quarterly profit despite the seasonal downturn in the third quarter. DB Financial Investment also expects F&F’s third-quarter results to exceed market expectations with sales of 320.4 billion won and operating profit of 80.1 billion won. Particularly encouraging is the expanding contribution of the rapidly growing Chinese subsidiary’s performance. Seo Hyunjung, a researcher at Hana Financial Investment, analyzed, “As of the end of the third quarter, the number of stores in China is understood to have increased to 380,” adding, “Considering that the number of stores in China was 240 at the end of the second quarter, the aggressive store expansion pace is directly leading to sales growth.” Hana Financial Investment expects Chinese sales to reach 311.2 billion won for the full year, a 318% increase year-on-year, expanding the proportion of consolidated sales to 26%.

Securities firms are successively raising their target prices for F&F. DB Financial Investment raised F&F’s target price from 650,000 won to 1,100,000 won, and KTB Investment & Securities raised it from 850,000 won to 1,100,000 won. Meritz Securities adjusted it upward by 11% to 1,000,000 won, and Hana Financial Investment also raised it from 860,000 won to 1,000,000 won. Park Hyunjin, a researcher at DB Financial Investment, said, “F&F stands out as one of the few fashion companies delivering results in the Chinese market,” adding, “As overseas sales growth accelerates, the valuation level can be aligned with other companies benefiting from Chinese consumer demand, which is also attractive.”

This content was produced with the assistance of AI translation services.