Entertainment Stocks, Will They Recover This Year... Stock Prices Gradually Rising

TWICE under JYP (Photo by Asia Economy DB)

[Asia Economy Reporter Geum Bo-ryeong] Last year, entertainment stocks, which had been declining due to Big Bang's Seungri's 'Burning Sun scandal' and others, are showing signs of gradual recovery thanks to expectations of the lifting of China's 'Hanhanryeong (Korean Wave ban)' and the resumption of activities by affiliated celebrities.

According to the Korea Exchange on the 18th, YG Entertainment (YG) closed at 34,950 KRW the previous day. Considering it was 31,750 KRW on the 10th, the stock price rose 10.08% in a week. During the same period, JYP Ent. rose 14.26% from 23,500 KRW to 26,850 KRW, and SM increased 5.75% from 35,650 KRW to 37,700 KRW.

In YG's case, there is a prospect to look forward to Big Bang's activities this year. Although the re-contracting status of all Big Bang members after their discharge at the end of last year remained uncertain, the confirmed news of Big Bang's appearance at 'Coachella' raised the possibility of full-group activities. Nam Hyo-ji, a researcher at KTB Investment & Securities, explained, "From 2015 to 2017 when Big Bang was active, average concert sales reached 53.4 billion KRW, and royalties were about 63.5 billion KRW," adding, "Blackpink's contribution to earnings is also expected to increase compared to last year. Last year, they released one album and held 31 tours, but this year they are preparing to release an album in the first quarter, so at least two albums can be expected within the year."

'Big Bang' under YG (Photo by Asia Economy DB)

JYP is expected to have a meaningful year as the Chinese market reopens this year. Yuseongman, a researcher at Hyundai Motor Securities, said, "Twice and ITZY are scheduled to release albums this year. ITZY is entering the profit-generating phase this year and plans to hold full-scale overseas tours including Southeast Asia," emphasizing, "Recently, a Korea-China joint venture company (another company) was established for Korean Wave performances in China, and if Chinese business resumes amid the overall atmosphere of lifting Hanhanryeong, JYP's significant earnings growth seems possible."

SM is inevitably facing a decrease in activities this year due to artists' military enlistments, but activities of highly profitable rookie artists are expected to increase. In particular, album sales and the number of performances by NCT 127 and NCT DREAM are increasing, so their profit contribution is expected to gradually rise. Researcher Nam said, "Concerns about a temporary deterioration in fourth-quarter results last year may be reflected in the stock price, but expectations for increased activities in China and shareholder value enhancement remain."

NCT 127 under SM Entertainment (Photo by Yonhap News)