[Click eStock] "F&F, Business Diversification Hopes on China Sales Recovery"

On the 17th, KB Securities maintained a buy rating and a target price of 200,000 KRW for F&F, stating that in the short term, a rapid recovery in sales in China is expected, and in the mid to long term, there are abundant business diversification momentum such as expanding sales in Southeast Asia.

F&F's consolidated sales for this year are expected to increase by 17% year-on-year to 2.1175 trillion KRW, and operating profit is forecasted to rise by 16% to 606 billion KRW.

Although the sales growth rate in the first quarter is expected to be only 8%, sales in the second to fourth quarters are projected to grow around 20%. Domestic consumption channels are expected to experience sluggish sales throughout the year due to a high base effect, but sales in China are anticipated to recover this year, and duty-free sales are also expected to stop declining from the third quarter.

Consolidated sales for the first quarter are expected to increase by 8% year-on-year to 472.8 billion KRW, and operating profit is forecasted to rise by 1% to 135.5 billion KRW. The operating profit margin is expected to decrease by 2.1 percentage points compared to the same period last year, attributed to the slowdown in domestic consumption channel sales and a decline in the rate of normal price sales.

Shinae Park, a researcher at KB Securities, explained, "MLB Korea's pure domestic sales are expected to decline by 4% year-on-year to 67.4 billion KRW, and duty-free sales are forecasted to drop by 30% to 47.3 billion KRW. Discovery is estimated to record sales of 105.5 billion KRW, down 5%, due to the base effect and mild weather."

Additionally, MLB KIDS is expected to see a 6% decrease in sales due to a high base effect, while the Chinese subsidiary is anticipated to achieve strong results with a 31% increase in sales. Since last month, Chinese consumer sentiment has significantly recovered, leading to active inventory deliveries. However, online sales are expected to have increased by only 3%.

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