[Click eStock] "F&F, Strong in China but Marketing Costs Rise... Target Price '↓'"

Shinhan Investment Corp. analyzed on the 31st that F&F's growth in China will remain steady. However, due to increased marketing expenses, the operating profit estimates were slightly lowered, and the target price was reduced from 220,000 KRW to 180,000 KRW.

F&F recorded consolidated sales of 405.5 billion KRW and operating profit of 110.1 billion KRW in the second quarter. This represents increases of 9% and 16%, respectively, compared to the same period last year. Hyunjin Park, a researcher at Shinhan Investment Corp., said, "Domestic demand was weaker than expected, but China remained steady," adding, "The number of MLB stores in China increased by 88 stores compared to the previous quarter based on regular stores, and the total number of stores including pop-up stores reached 983. At the current pace, it is expected to exceed the initial annual target of 1,100 stores."

He anticipated that domestic demand would remain sluggish in the third quarter, but growth in China would accelerate. He stated, "In China, the pace of store openings centered on MLB and MLB Kids has accelerated compared to the previous quarter," and "Recognition of export sales to China for the Duvetica and Supra brands is pending."

He emphasized, "The second half of the year store plans in China for Duvetica and Supra are 23 and 25 stores respectively, with about 50 new store openings awaiting," adding, "The new sales from these two brands in China are expected to be approximately between 6 billion and 9 billion KRW this year, and in 2024, the contribution to related sales is expected to increase significantly."

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