Reporter Oh Jeong-eun of Money Today | 2023.05.17 11:07
Point of the day
“I was embarrassed because of Blackpink’s Lisa.” (Naver item discussion board) K-pop stocks rose through the roof as the combined 1st quarter performance of the 4 domestic entertainment companies (Hive YG Entertainment, JYP Ent. SM) recorded an all-time high. As the fan spirit leading the sympathy of the two expands to the global market, the march of K-pop stocks to break through all-time highs has begun.
As of 11:01 am on the 17th, YG Entertainment is trading at 90,500 won on the KOSDAQ market, an increase of 5,500 (6.47%) from the previous day. It is trying to settle in the 90,000 won range by renewing the reported price of 97,000 won during the day.
JYP Ent. also trading at 119,300 won, an increase of 3,900 (3.38%) from the previous day. It set a new all-time high of 119,800 won during the mid-day. Its market capitalization exceeded 4.2 trillion won. At the same time, SM also rose 5.31%, and Hive also rose 2.11% in the KOSPI market, continuing the bullish trend across the entertainment industry.
Hive, YG Entertainment, SM, JYP Ent. All four domestic entertainment companies have completed their first quarter earnings announcements. The combined sales of the four entertainment companies in the first quarter were 890 billion won and operating profit was 150.5 billion, a record high. Among the four companies, only SM was slightly below market expectations, while Hive posted better-than-expected results, while YG Entertainment and JYP Ent.
Ji In-hae, a researcher at Shinhan Investment & Securities, said, “The key to the good performance is that sales such as albums, music sources, and goods (products) with high profitability have grown rapidly due to the expansion of IP (intellectual property rights ), and the operating profit has been raised.” The huge ransom of K-pop artists like Pink has also been confirmed.”
He explained, “In a situation where all the intellectual property rights belong to the entertainment company, the global fandom expands, and albums and merchandise are sold even outside of” the season when artists are not active.”
Last April, Hive’s album Seventeen sold more than 4 million copies, breaking BTS’s record. Researcher Ji evaluated, “As the global fandom expands, the growth of album sales in North America and other regions is encouraging, and entertainment companies have now become true exporters.”
The ransom of K-pop artists is also increasing. YG Entertainment’s Blackpink is holding a large-scale world tour for about a year between August 2022 and August 2023. As world tours become more popular around the latter half of the year, the minimum guarantee (minimum profit guarantee) continues to get up BLACKPINK’s average minimum guarantee rose to 1.3 billion won in the fourth quarter of last year and the first quarter of this year. In particular, YG Entertainment and JYP Ent. surprised investors with an incredible performance that far exceeded market expectations.
YG Entertainment’s first-quarter sales increased 108.6% year-on-year to KRW 157.5 billion, and its operating profit increased 497.6% to KRW 36.5 billion. The previous operating profit consensus (average of market forecasts) was KRW16.3 billion, more than double the forecast.
Lee Ki-hoon, a researcher at Hana Securities, said, “We have completely removed the doubts about profitability that have been raised since the second half of last year.” There is room for improvement on all of this.”
He predicted, “Depending on whether Baby Monster is successful or not, the number of artists who sell 1 million albums, which is the most important investment point in the K-pop industry, will increase from 1 Blackpink team to 2 teams.”
JYP Ent recorded the highest quarterly performance in the first quarter, with sales of 118 billion won, up 74.1% from the previous year, and operating profit of 42 billion won, up 119.3% from the previous year. Operating profit exceeded market expectations by more than 50%. In particular, indirect sales led JYP Ent. using artists’ IP for increased profits. They found that sales of albums and digital music increased by 54%, and other sales including content increased by 144%. Dwywaith and Enmix recorded album sales of 1.8 million and 680,000 copies, respectively.
JYP Ent.’s strong earnings are expected. continue in the second quarter. Lee Nam-soo, a researcher at Kiwoom Securities, predicted, “The comeback of Stray Kids in the second quarter and performances by Twice and Nmix will continue the trend of new earnings.”
In response to the related surprise earnings announcement, the stock market continued to raise targets for YG Entertainment and JYP Ent. After the announcement of the first quarter results, 12 securities firms raised their target prices for YG Entertainment, and 13 securities firms raised their target prices for JYP Ent.
[저작권자 @머니투데이, 무단전재 및 재배포 금지]
