[Click eStock] "HYBE to Integrate Weverse and V LIVE in the First Half of the Year"

Expected to Miss Q4 Earnings Consensus Last Year Due to Increased Concert Costs
DB Financial Investment "Maintains Hive Target Price at 370,000 KRW"

[Asia Economy Reporter Gong Byung-sun] HYBE's fourth-quarter performance last year is expected to fall short of market consensus. However, the integration of the fandom platforms 'Weverse' and 'V Live' scheduled for the first half of this year is anticipated to create growth momentum.

On the 24th, DB Financial Investment estimated HYBE's fourth-quarter revenue last year to be 378.9 billion KRW, a 21% increase compared to the same period last year, and operating profit to be 71 billion KRW, a 28% increase over the same period. The operating profit is about 9.55% below the consensus.

In the fourth quarter of last year, album sales by artists such as Seventeen and Enhypen reached 4.83 million copies, significantly contributing to revenue. Additionally, the online broadcast of the concert in Los Angeles (LA), USA, also led to increased sales. However, the rise in costs due to offline concert operations, logistics expenses, and labor costs are believed to have negatively impacted profitability.

DB Financial Investment expects the upcoming integration of Weverse and V Live to serve as a momentum driver. Hwang Hyun-joon, a researcher at DB Financial Investment, said, "It is unfortunate that the full recovery of offline performances is delayed due to the spread of the new COVID-19 variant 'Omicron,' but if the large traffic possessed by V Live connects to Weverse's business model (BM), it will contribute to HYBE's mid- to long-term performance and corporate value."

Accordingly, DB Financial Investment maintained its investment opinion of 'Buy' on HYBE with a target price of 370,000 KRW. Researcher Hwang said, "Even considering the slower-than-expected recovery of performances, expectations for new businesses such as non-fungible tokens (NFTs) utilizing intellectual property (IP) are also being reflected." The closing price on the 21st was 285,000 KRW.