[Alpha Biz= Kim Sangjin] NH Investment & Securities maintained a "Buy" rating and a target price of 90,000 KRW for JYP Entertainment on the 7th.
NH Investment & Securities stated, "The recent rise in JYP's stock price has been driven by expectations of strong performance from Stray Kids' expanded tour, while anticipation for the debut of rookie artist 'Kickflip' has been relatively muted."
The firm added, "This is largely due to the historically low hit ratio of JYP's lower-year lineup. However, Kickflip is managed by the 3rd division, which also handles TWICE, differentiating it from other newer lineups, and a unique trajectory is expected."
They also noted, "The reaction from K-pop fandom to the members revealed on the 6th has been generally positive. With the debut album set to release on the 20th, there is a high possibility of upside given the previously low market expectations."
NH Investment & Securities forecasted JYP's consolidated Q4 revenue at 170.6 billion KRW, up 9% year-on-year, and operating profit at 42.5 billion KRW, up 12%, exceeding consensus estimates. "This growth will likely be driven by the new releases and concert effects of TWICE and Stray Kids," they explained.
Key releases included in the quarterly estimates are Stray Kids' special album and TWICE's mini album. Key activities include revenue from Stray Kids' world tour performances and merchandise sales, as well as deferred revenue from TWICE's Japan tour.
Despite continued pressure from rising operating expenses due to content production costs for Kickflip's debut and seasonal factors, NH Investment & Securities predicted, "Thanks to the activity of high-year artists, the operating profit margin will remain resilient at 25%."
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
