[Click eStock] “JYP Ent. The Growing Contribution of NiziU to Earnings”

[Asia Economy Reporter Eunmo Koo] KTB Investment & Securities forecasted that JYP Ent.'s global exposure of its affiliated artists will expand, and the long-pursued ‘JYP 2.0’ strategy will be fully activated. In particular, this year, the activities of NiziU will be fully reflected, allowing for confirmation of the previously difficult-to-estimate contribution to performance.

On the 15th, researcher Nam Hyoji of KTB Investment & Securities estimated in a report that JYP Ent.'s sales in the fourth quarter of last year would record 34.8 billion KRW, down 21.6% from the same period last year, and operating profit would decrease by 12.7% to 11.8 billion KRW. Album and original sound source sales are expected to increase by 18.1% year-on-year to 19.6 billion KRW. Overseas digital music sales have shown a continuous upward trend, and album sales performed well. Fourth-quarter album sales reached 1.04 million copies (according to Gaon Chart), with GOT7 selling 340,000 copies, TWICE 480,000 copies, and Stray Kids 200,000 copies. Last year's album sales totaled 3.57 million copies, a 28.9% increase compared to 2019.

Since GOT7's contract expires on the 19th, related performance has been excluded from future estimates. Researcher Nam said, “GOT7's annual album sales are about 800,000 copies, accounting for about 25% of JYP Ent.'s total sales over the past two years,” and added, “Despite the decrease in GOT7's sales this year, sales are expected to increase (to 4.37 million copies) due to the expansion of the artist lineup.”

Meanwhile, the fourth quarter of last year was the first quarter to reflect NiziU-related performance. Researcher Nam explained, “The single ‘Step and a step,’ released on December 2 last year, is estimated to have sold 460,000 copies,” adding, “Since this is royalty revenue, it has a high profit contribution.”

High profit margins are expected to be maintained this year as well. One reason cited was the relatively short career duration of the artists. Researcher Nam explained, “Except for 2PM, all affiliated artists are within their seventh year or less. With two boy groups debuting this year, the rookie-level artist lineup will be further expanded, and the increase in royalties will be limited.”

The expanding proportion of overseas sales is also positive. Researcher Nam said, “With increased activities of NiziU in Japan and ITZY’s release of an English album, the global exposure of affiliated artists will rise,” and explained, “Since most overseas sales are royalty-type revenues, they contribute significantly to profits.”

This year, sales are estimated to increase by 27.4% from last year to 175.2 billion KRW, operating profit to rise by 26.3% to 57.3 billion KRW, and net profit to grow by 32.6% to 43.2 billion KRW.