Stock market experts lowered their stock price target, saying YG Entertainment is expected to suffer poor performance due to their artists’ activity hiatus in the 4th quarter of last year.
Giving estimated figures about YG’s sales in the 4th quarter of last year and their operating profit, which might be below the forecast number, Choi Min-ha, a stock researcher at Samsung Securities, said, “There artists’ activities were relatively more passive than other quarters. Tencent Music’s stock price also falls more than the previous quarter, reflecting the loss of equity valuation as non-operating expenses.”
Researcher Choi continued, “Considering the artists’ activity schedule, we made an estimate of the company’s performance in the first half of the year. Sales from concerts, including tours, will be postponed to the second half. This year’s profit target has been lowered from 35 billion won to 25 billion won”.
“When the artist’s activities resume in earnest from the middle of this year, YG’s performance will expand, and the stock price will increase. As TREASURE is strengthening their fandom, they will be more active this year than the previous one. In addition, BLACKPINK is likely to carry out full-fledged activities and world tours with a new album release in the middle of this year”, the researcher analyzed.
Nam Hyo-ji, a researcher at SK Securities, also said, “Although two offline concerts have been held for the first time since the pandemic spread, their contribution to profits is low due to the limitation of the number of seats.”
He continued, “Album sales are expected to be 297,000 units, and losses related to equity valuation and production dramas will be partially reflected. As the break of their major artists’ activities got longer, this year’s operating profit is estimated to be lowered by 14.9%. However, considering the possibility of offline activities to be resumed, and diversified profits this year, the possibility of a rise in stock prices is high.”