[Alpha Biz= Kim Sangjin] Korea Investment Securities Raises JYP Entertainment Target Price to 86,000 KRW, Forecasts Strong Growth from New Artist Lineup
On the 23rd, Korea Investment Securities raised its target price for JYP Entertainment from 81,000 KRW to 86,000 KRW, a 6% increase, citing expectations for the upcoming activities of new artists in the company’s lineup. The investment recommendation remains a “Buy.”
Korea Investment Securities noted that JYP Entertainment's fourth-quarter sales are expected to reach 1.747 trillion KRW, an 11% increase year-on-year, while operating profit is projected to rise by 6% to 403 billion KRW, surpassing the consensus estimate of 382 billion KRW by 5%.
The report highlighted strong contributions from artists like Stray Kids, TWICE, and ITZY in music sales (4th-quarter sales are estimated at 4.25 million albums). Concerts, including Stray Kids and Day6’s tours, as well as TWICE's Japanese performances, are also expected to drive revenue growth.
The brokerage firm further anticipated good sales of merchandise (MD) due to increased tour attendance, projecting record-high revenue despite a slight decrease in profitability due to production costs related to the KBS audition program "The Dandara," which aired from November to January. Most of the production costs for the show are expected to be reflected in Q4, with some participants continuing their activities under JYP’s subsidiary, Init Entertainment.
While concerns had existed over JYP’s underperformance with younger artists compared to older ones, Korea Investment Securities emphasized that this year, as new artists begin their full-fledged activities, the potential for growth from these younger acts is expected to rise. The debut of the boy group Kickflip on January 20th has already shown stronger-than-expected sales, with 300,000 pre-orders and 270,000 units sold in just the second day. Furthermore, NEXX will embark on a Japanese tour and Korean performances, where MD sales such as light sticks and dolls are expected to soar.
Korea Investment Securities also highlighted that NMIXX is currently on a global fan concert tour, confirming strong demand from Latin America and Asia. After releasing a new album, NMIXX is expected to embark on a world tour.
Additionally, global group VCHA will begin full-fledged activities in the first half of the year with an album release, and the Latin girl group project (L2K) and a Chinese boy group debut are also planned for this year.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
