April 20, 2024

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[THE INVESTOR] Fila Korea’s third-quarter earnings were higher than expected, said Korea Investment and Securities on Nov. 13 maintaining a “buy” recommendation and 60,000 won (US$52.69) target price. 

Its revenue in the period hiked 28 percent on-year to 725.9 billion won and operating profit by 108 percent to 73.9 billion won, 42 percent higher than market consensus. Operating profit rose sharply across sectors as quality improvement and price adjustments boosted sales, while it managed to cut costs by 8.3 percent. In the US, it is expanding product categories to higher priced range, and partnership with shoe distributor Footlocker has pushed both shipments and prices, said analyst Na Eun-chae.

Its operating profit margin in Korea excluding commissions is 8.7 percent and there still is room for improvement. Its price-earnings ratio is at 15 times, much lower than global peers, said the analyst suggesting it as a “top pick.” 

By Hwang You-mee (glamazon@heraldcorp.com)