BTS’ agency HYBE announced that they plan to debut 4 or more groups as a solution for predicted falling sales after BTS’ enlistment.
HYBE’s CEO Park Ji-won announced the letter to shareholders on October 17th, saying “We have been preparing for this situation that will come one day since a long time ago”, adding “In the short term, some members have been scheduled to carry out individual activities until the first half of 2023 and we have also prepared various content in advance to make sure that BTS can be with their fans.”
The CEO continued, “We also fully understand that investors are concerned about whether HYBE will be able to continue the growth when BTS’s activities are restricted”, adding “We have planned a multi-label strategy that allows us to consistently produce music and artists. We are also taking on various challenges with new technologies, such as platform business and game business.”
Therefore, the detailed strategy proposed by HYBE includes debuting 4 groups in Japan and the U.S next year with K-pop production methods, adding the live streaming function to the fan communication platform Weverse, introducing a new subscription service, continuously updating and expanding the publishing of “In the SEOM with BTS” game, and applying Superton’s AI-based voice and song synthesis technology.
In addition, except for BTS, the sales of existing artists such as SEVENTEEN, TXT, ENHYPEN, LE SSERAFIM, NewJeans, fromis_9, Justin Bieber, and Ariana Grande have also recorded an average annual growth rate of more than three times compared to last year, including the cooperation and competition among the existing 9 labels under HYBE.
It is analyzed that the confirmation of BTS’ enlistment will adversely affect the stock price of HYBE.
Previously, HYBE announced that it is reducing its dependence on BTS’ sales via business diversification, and made moves such as entering the game industry, but as of the moment, the dependence rate is still high. Nevertheless, HYBE succeeded in reducing its dependence on BTS from 80% at the time of listing to 60%.
As uncertainty over BTS’ enlistment continued, the securities industry is also lowering their target price for HYBE. This is shown via reports of various securities firms’ research centers, which all lowered their target prices.
For instance, Hyundai Motor Securities, which published a report on October 4th, lowered its target price from 250,000 won to 210,000 won, while Daol Investment & Securities lowered its target price from 240,000 won to 180,000 won. NH Investment & Securities lowered it from 310,000 won to 250,000 won, while Samsung Securities lowered it to 210,000 won from 270,000 won.