F&F is expected to benefit from the special shopping day and holiday season in the fourth quarter as the fashion brand MLB is growing well in China.
Shinhan Financial Investment raised its target price of F&F from 650,000 won to 850,000 won on the 6th and maintained its investment opinion as a 'buy'.
"The third quarter of domestic clothing is an industrial off-season, but MLB's growth in China will continue in the third quarter," Shinhan Investment said. "We expect sales of high-margin products such as padding and fleece to increase in the fourth quarter and create a positive environment for consumption such as shopping day and holidays.".
F&F is expected to generate sales of 1.3743 trillion won and operating profit of 344.9 billion won on a consolidated basis in 2021. Sales are up 64.1% and operating profit is up 189.7% from 2020.
After securing MLB sales rights in China in January 2019, F&F is expanding its business in China, focusing on 'F&F Shanghai', a Chinese subsidiary.
As of the end of the second quarter of 2021, MLB secured about 240 offline stores in China. By the end of this year, it is expected to expand its stores to more than 400 branches thanks to its popularity in China.
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
