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Hyundai Motor Securities lowered YG Entertainment's target stock price to KRW 44,000, down 10.2% from KRW 49,000.

Business / Kim SangJin / 07/12/2024 03:09 AM

YG Entertainment

 

[Alpha Biz= Reporter Kim Sangjin] On the 11th, Hyundai Securities adjusted down the target price for YG Entertainment from 49,000 KRW to 44,000 KRW, a 10.2% reduction, while maintaining a neutral "Market Perform" rating.

Hyundai Securities stated, "YG Entertainment's 2nd quarter revenue decreased by 40% year-on-year to 95 billion KRW, with operating profit plummeting by 94.5% to 1.6 billion KRW, significantly below market expectations. Second-quarter album sales increased by 4% year-on-year to 680,000 units, while concert attendance dropped by 75% year-on-year to 170,000 people. Despite an increase in album sales from the previous quarter by 490,000 units, the decline in concert attendance by 160,000 people indicates challenging performance metrics compared to the previous year."

They continued, "Boy group TREASURE plans to release a mini album (their first physical album of the year) around the end of the third quarter or early fourth quarter, followed by additional fan meetings and embarking on a tour by year-end. Girl group BABYMONSTER aims to release their second physical album in the fourth quarter and hold solo concerts starting from early 2025. As a result, second-half album sales are expected to decrease by 5% year-on-year to 2.1 million units, with concert attendance dropping by 44% year-on-year to 400,000 people. Despite an expected decline compared to last year, we anticipate performance improvement compared to the first half. The key to recovery in 2025 lies in the full-scale activities of BLACKPINK, the expanded concert scales of BABYMONSTER and TREASURE, and the debut of new artists."

Hyundai Securities also adjusted their outlook, lowering the album sales forecast to 3 million units and concert attendance to 900,000 people, down 33% and 31% respectively from previous estimates. Consequently, their profit forecast was revised down by 7% for revenue to 448.7 billion KRW and by 55% for operating profit to 25 billion KRW. They emphasized a cautious approach, suggesting that a profit turnaround may be viable post-fourth quarter but remains to be seen.

Meanwhile, on the 11th, YG Entertainment closed trading at 38,200 KRW, down 2.05% (800 KRW) from the previous trading day (39,000 KRW). The intraday high was 39,150 KRW, and the low was 38,000 KRW.

 

 

 

AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)

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