The 3rd-quarter performance of YG Entertainment is expected to meet market expectations, but the 4th quarter is predicted to be weak
Meritz Securities reduced YG’s target price from KRW 96,000 to KRW 85,000 while maintaining a buy recommendation.
Researcher Jung Ji-soo stated in the report, “YG’s 3rd-quarter consolidated performance is expected to meet market consensus with revenue of KRW 1.306 trillion and operating profit of KRW 207 billion (market consensus for operating profit was KRW 219 billion).”
Jung added, “Thanks to the world tour by BLACKPINK that has been ongoing for the past year, strong performance was recorded until the 3rd quarter.”
However, Jung diagnosed, “In the 4th quarter, apart from the debut of the rookie girl group BABYMONSTER in November and three domestic concerts by TREASURE in December, there is a lack of artist activities, so a somewhat weak performance is expected with revenue of KRW 994 billion and operating profit of KRW 109 billion.”
Jung also explained, “As the renewal of BLACKPINK’s contract is uncertain, it may have a negative impact on YG’s short-term stock prices. However, we believe that related risks have been partly reflected in the stock price.”
Jung continued, “Although it is delayed compared to the initial plan, the initial performance of BABYMONSTER can mitigate the uncertainty about investment.”
Source: viva100
