On March 17th, Eugene Investment & Securities commented on YG Entertainment, maintaining a “buy” investment opinion and adjusting the target stock price upward to 68,000 won. “It is positive (that YG Entertainment) can reduce performance volatility by significantly decreasing the hiatus in artist activities”, said the firm.
At the same time, Lee Hyun Ji, a researcher at Eugene Investment & Securities, revealed that YG’s fourth-quarter sales and operating profit increased by 40.4% and 18.3% year-on-year to KRW 125 billion and KRW 15.7 billion, respectively, which fell short of market expectations.
Regarding this, she analyzed, “Major artists’ offline concerts have resumed, but BLACKPINK’s concert and MD-related profits have been delayed due to conservative accounting methods, and the cause lies in the impairment of consolidated profits due to the operating loss of YG Investment.”
However, the researcher also stated that considering all related issues, it is expected that YG would have recorded a solid performance in line with market expectations, if it were not for the difference in revenue recognition timing.
Regarding the 2023 performance of YG Entertainment, Lee Hyun Ji predicted, “BLACKPINK is conducting a large-scale world tour until the first half of this year, and with Jisoo’s solo activities, they are contributing to the performance by driving growth in all areas.”
“Treasure’s album sales performance is somewhat disappointing, but they have successfully entered the Japanese market and will make a significant contribution to the performance as they continue their Asian tour from April”, she also added.
Regarding the rookie girl group BABYMONSTER, the researcher predicted, “The postponement of the debut is disappointing, but the expectations for a new artist, who will be unveiled after seven years, are valid, and the stock rebound momentum will be abundant as their debut approaches.”
In particular, she positively assessed the fact that YG has been significantly reducing its artists’ activity gap by organizing multi-unit organizations for artists and establishing a production center since this year.
“We expect a very different year from last year,” she said, adjusting the target stock price from the previous 65,000 KRW to 68,000 KRW.
Meanwhile, on March 17th, YG closed at 55,100 KRW in the stock market, up 6.17% from the previous day.
Source: MK
