[Click eStock] BTS Resumes Concerts... "HYBE's Strong Year-End"

[Asia Economy Reporter Ji Yeon-jin] Korea Investment & Securities stated on the 15th that it maintains a buy rating and a target price of 380,000 KRW for HYBE, forecasting that the company will further leverage its concert business by increasing per-show sales based on strong global audience attraction and distributing content through Weverse.

Park Ha-kyung, a researcher at Korea Investment & Securities, explained, "With BTS holding concerts in Los Angeles, USA, in November and December, HYBE became the first entertainment company to resume offline performances. In October, TXT's online concert, in November, Seventeen's domestic concert (offline status undecided), and BTS's concerts in the US (offline) and domestically (online) are scheduled. Even if BTS does not release an album in Q4, content derived from the concerts is expected to drive earnings."

HYBE's sales in Q3 increased by 85% year-on-year to 352.4 billion KRW, and operating profit rose by 76% to 70.8 billion KRW. The operating profit slightly missed the consensus of 75 billion KRW due to the absence of large-scale content such as online concerts. However, with the elimination of one-time costs incurred in the first half, the operating margin is expected to improve by 10 percentage points compared to the previous quarter, recording the highest quarterly operating profit ever.

With album releases from BTS and TXT, Q3 album sales are expected to reach 4.85 million copies, a significant increase from 900,000 copies in the same period last year, and album revenue is projected to rise 211% to 145.5 billion KRW. In the case of MD, sales of products released in Q2 are recognized in Q3, estimating sales to increase by 20% year-on-year to 120 billion KRW. Content sales are expected to be 50 billion KRW, reflecting Seventeen's online fan meeting.

Regarding Weverse, in Q3, despite the absence of large-scale content, the contribution of BLACKPINK, who joined in August, is understood to be limited. Since BLACKPINK is still in the early stages, the MD lineup was weak, but it is expected that contribution will gradually increase as the lineup strengthens and core fan inflow accelerates toward the year-end peak season.