Positive Earnings and New Businesses... 'F&F·HYBE' Target Price Upgrade Relay

Hotel Shilla and AmorePacific Slump One After Another Amid Prolonged Slump

[Asia Economy Reporter Park Jihwan] Securities firms are actively recommending buying by raising the target prices of F&F and HYBE. This is because they have secured mid- to long-term growth potential through continued upward trends in earnings, mergers and acquisitions (M&A), and entry into new businesses. On the other hand, Hotel Shilla and Amorepacific, which fell into poor earnings, saw a relay of target price downgrades.

According to financial information provider FnGuide on the 8th, a total of 74 securities reports raised target prices from the 1st to the 5th. Among them, the companies with the most target price upgrades were F&F and HYBE, each with 8. F&F's record-breaking earnings streak is cited as the main reason for the target price increase. F&F's third-quarter sales and operating profit were 329 billion KRW and 96 billion KRW, respectively, up 106% and 660% year-on-year. This is the highest quarterly operating profit ever, exceeding market expectations by 31%. Park Hakyeong, a researcher at Korea Investment & Securities, said, "Strong growth is expected in the fourth quarter as it is the peak season for clothing," adding, "In addition to improving profitability through domestic market share expansion and new store openings in China, mid- to long-term growth drivers have been secured through the acquisition of the global golf brand TaylorMade."

HYBE's strong third-quarter performance and entry into new businesses such as NFTs (non-fungible tokens) appear to have had a positive effect. HYBE posted an operating profit of 65.6 billion KRW in the third quarter, a 63% increase compared to the same period last year. Sales during the same period were 341 billion KRW, up 80%. Both operating profit and sales were the highest quarterly results. HYBE is also expected to generate additional revenue by linking its artists with NFTs to digitalize goods, content, and other digital assets.

In the case of EcoPro BM, seven securities firms raised target prices due to third-quarter earnings growth and the announcement of large-scale expansion plans. Juminwoo, a researcher at NH Investment & Securities, said, "Reflecting the increase in anode material production capacity, we revise upward operating profit estimates for 2024, 2025, and 2026 by 28%, 29%, and 43%, respectively," raising the target price from 480,000 KRW to 800,000 KRW.

Conversely, 62 reports were recorded with downgraded target prices. Among them, Hotel Shilla had the most with 7. Hyosung Chemical and Amorepacific (4 each) followed. Poor earnings were commonly cited as the reason for the target price downgrade. Hotel Shilla's third-quarter operating profit was 20.9 billion KRW, 57% below the market expectation of 48.3 billion KRW. Hyosung Chemical also posted an operating profit of 32.9 billion KRW, 48% less than the market forecast of 63.3 billion KRW. Amorepacific recorded an operating profit of 50.3 billion KRW, down 35% from securities firms' expectations due to poor performance in its main market, China.

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