[Alpha Biz= Reporter Kim Sangjin] Hana Securities projected on the 25th that F&F would exit its trend of weakening earnings momentum due to confirming the bottom of domestic sales and a stabilization of growth rates in China. The firm recommended a long-term buying strategy, maintaining a "Buy" rating and a target price of KRW 90,000.
Hana Securities estimated that F&F's consolidated revenue for the third quarter would be approximately KRW 472.1 billion, down 4% year-on-year, while operating profit is expected to decrease by 18% to KRW 121.5 billion. The report cited sluggish domestic consumption and the impact of late summer heat in September as significant factors affecting clothing consumption.
Additionally, the growth rate of F&F's China operations is expected to be limited to 3% year-on-year, with minimal increase in store numbers due to the closure of inefficient locations and challenging consumer conditions in China. As a result, the operating profit margin is expected to widen compared to the first half of the year.
However, Hana Securities noted that the decline in earnings momentum appears to be stabilizing. Analyst Seo stated, "Domestic sales are expected to gradually recover from the third quarter," and with restructuring of underperforming stores in China, a rebound in growth rates for existing MLB stores is anticipated.
Hana Securities also highlighted potential in the new business areas, such as the expansion of new brand sales and the IPO of Tailor-Made, affirming that this is an effective point for bottom-fishing from a medium- to long-term perspective.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
