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[Alpha Biz=(Chicago) Reporter Kim Jisun] YG Entertainment fell on the 2nd on news that it has decided not to sign additional contracts for individual activities of girl group BLACKPINK.
YG Entertainment closed at 47,550 won on the KOSDAQ market, down 6.58% from the previous trading day. The move is attributed to BLACKPINK's decision not to sign additional personal contracts with its four members, although it continues its team activities at YG Entertainment.
Other entertainment stocks, on the other hand, saw their stock prices rise. Hive rose 3.43%, SM 1.30%, and JYP Ent 0.10%.
"As Black Pink's personal exclusive contract fell through, the company lowered its target stock price due to multiple adjustments," said Kim Hye-young, a researcher at Daol Investment & Securities, lowering YG Entertainment's target price by 30% from KRW 100,000 to KRW 70,000 at once. However, the investment opinion maintained the BUY.
Researcher Kim predicted that YG Entertainment's sales gap will occur in the future as all Blackpink members set up personal labels.
"YG Entertainment has lowered its target stock price following the failure of its exclusive contract with Black Pink," researcher Kim said. "However, the stock price is expected to change depending on the success of the new girl group, Baby Monster."
YG Entertainment is expected to generate sales of 544.1 billion won and operating profit of 90.8 billion won in 2024 on a consolidated basis. Sales will decrease by 2.8% and operating profit will increase by 0.6% compared to 2023 estimates.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
