[Weekly HOT Stocks] "JYP Entertainment Expected to Maintain High Profit Margin This Year"

Rookie Group Momentum Remains... Two Male Groups Scheduled to Debut This Year

ITZY under JYP (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Bo-ryeong] Individual investors have shown great interest in JYP Entertainment (JYP Ent.) over the past week.

According to the Korea Exchange on the 16th, from the 11th to the 15th, individual investors purchased JYP Ent. stocks worth 25.2 billion KRW. During this period, JYP Ent. ranked 4th among the top net-buy stocks by individual investors in the KOSDAQ market.

Regarding JYP Ent.'s Q4 performance last year, KTB Investment & Securities estimated sales of 34.8 billion KRW and operating profit of 11.8 billion KRW. Compared to the previous year, sales decreased by 21.6% and operating profit by 12.7%. However, compared to the previous quarter, sales are expected to increase by 0.5% and operating profit by 5.9%.

In particular, album and original sound source sales are expected to increase by 18.1% year-on-year to 19.6 billion KRW. Along with strong album sales, overseas digital music sales are also continuously increasing. According to the Gaon Chart, Q4 album sales volume was 1.04 million copies.

It appears that high profit margins can be maintained this year. Researcher Nam Hyo-ji of KTB Investment & Securities cited low artist seniority and an expanded share of overseas sales as the basis. Nam said, "Except for 2PM, all JYP Ent. artists are within their 7th year or less, and with two boy groups debuting this year, the rookie-level artist lineup will expand again. Overseas digital music sales are continuously increasing. Activities of NiziU in Japan and the release of ITZY's English album are also increasing global exposure of JYP Ent. artists. Since most overseas sales are royalty-based, they contribute significantly to profits," he analyzed.

The momentum for rookie groups remains. Researcher Lee Ki-hoon of Hana Financial Investment said, "In February, a male group will be formed through the SBS program 'LOUD,' and in the second half of the year, a male group debut is planned in China. Also, it is estimated that the Japanese male version of the Nizi Project could debut by 2022 at the latest. The debut of a total of three Korean, Chinese, and Japanese male groups within two years is a momentum rarely seen in any entertainment company," he explained.