[Click eStock] "YG Benefits from Simultaneous Activities of Blackpink and Treasure in Q3"

KTB Investment & Securities Report
Expected Album Sales This Year: 1.76 Million Copies
High Potential for Success with Online Concerts

[Asia Economy Reporter Minji Lee] KTB Investment & Securities maintained a buy rating on YG Entertainment on the 13th, expecting that simultaneous activities of BLACKPINK and TREASURE will lead to the highest-ever album sales in the second half of the year. They raised the target price by 35% from the previous level to 54,000 KRW.

YG Entertainment recorded an operating profit of 1.8 billion KRW in the second quarter, surpassing the market's expected operating loss of 2.3 billion KRW. Sales increased by 4.4% from the previous quarter to 55.2 billion KRW.

The remaining portion of BLACKPINK's Japan tour conducted in the first quarter was recognized, and YG PLUS's golf business performed well, resulting in better-than-expected earnings. Non-operating income included an equity valuation gain of approximately 5.6 billion KRW from Tencent Music shares.

In the third quarter, with the comeback of BLACKPINK and TREASURE's debut, the highest album sales in history are expected. BLACKPINK's album released on the 26th of last month sold 300,000 copies. Combining the single released on August 28 and the full album on October 2, total sales are expected to reach about 1.05 million copies. TREASURE's debut album pre-orders reached 200,000 copies, and even conservatively estimating total sales, it is expected to be around 300,000 copies.

Nam Hyoji, a researcher at KTB Investment & Securities, said, "Despite TREASURE not being widely recognized yet, they recorded the highest pre-order volume in history," adding, "Considering that overseas sales were highest in Japan, China, and Korea in that order, it is predicted that overseas fandom growth will sharply increase concert and royalty revenues."

The expected album sales for this year are 1.76 million copies, an increase of 103% compared to the same period last year. Album revenue is projected to rise by 96% year-over-year to 22.4 billion KRW.

Researcher Nam Hyoji forecasted, "From next year, TREASURE's contribution will increase, leading to stable and high album revenues," and added, "If online concerts are held like other agencies, they could achieve success based on the high popularity of BLACKPINK and BIGBANG."