Cape Investment & Securities analyzed that SM is currently undervalued and they can expect full-fledged fandom profit gains through two groups NCT and aespa.
Cape Investment & Securities kept their “buy” investment opinion and the target price at 96,000 won. As of July 28th, SM’s stock price is 67,900 won.
Researcher Park Hyung-min analyzed, “NCT 127 attracted 280,000 audiences with 45 shows of their concert tour in 2019 and 250,000 audiences with 5 shows in May”, adding, “Considering the increase in album sales, it is expected that the number of concert audiences will increase rapidly”. He mentioned the global tour of the group in the first quarter of this year as a positive factor.
Another positive factor was pointed out to be the significant growth of aespa, whose initial album sales increased by more than 400% in about 9 months. Researcher Park said, “The initial sales of aespa’s first mini-album, which was released in October last year, was 270,000 copies. Their second mini-album, which was released this month, recorded 1.42 million copies in initial sales. This number is higher than that of BLACKPINK’s first full album, which held the No.1 sales record among K-pop girl groups’ albums”. He also expressed high expectations for aespa’s arena-class tour which is possibly be held next year.
SM’s consolidated sales and operating revenue in the second quarter of this year were estimated to be 176.5 billion and 19.8 billion won, respectively. It was a fall of 5% and 28%, respectively, compared to the same period last year.
Researcher Park analyzed, “The result in the second quarter of last year was high thanks to the release of EXO’s album as well as NCT DREAM’s first full album and repackage album. The performance decreased this quarter.”
He added, “SM is currently undervalued even if everything other than sales performed well”, adding “As the artists’ concerts will begin in earnest, the performances of SM’s concert-related labels, such as SM Japan and Dreammaker, are expected to see improvements.”