Hana Securities said there is a high possibility of renewing the contract with girl group BLACKPINK.
YG Entertainment announced on August 11th that its consolidated operating profit in the second quarter of this year is 28.9 billion won, up 209.3% from the same period last year. This is 28.2% higher than the market forecast of 22.5 billion won compiled by Yonhap Infomax.
Lee Ki Hoon, a researcher at Hana Securities, said, “YG recorded surprising results in the second quarter following the first quarter. Aside from BLACKPINK, boy group TREASURE’s steep increase in album sales and the factors that increase performance are continuously being reflected.”
He evaluated, “The combined operating profit in the last four quarters is 96.5 billion won, but this year’s operating profit forecast is lower than this. Given the current pace, annual operating profit could grow to around 110 billion won.”
It is estimated that there is a high possibility of renewing the contract with BLACKPINK, which is currently unclear whether or not to renew the contract.
Researcher Lee said, “BLACKPINK’s contract renewal has not been confirmed yet, but it is highly likely that there is no public announcement as the debut date (August 8th) already passed. When the contract is renewed, tight results will emerge every quarter, which will ease the undervaluation of YG’s stock price.”
He added, “We will first propose a target price assuming a renewal contract. If an issue arises, we will quickly reflect on it and change our investment opinion.“