Which Stocks Benefit from 'Retaliatory Travel, Performances, and Leisure'?

[Asia Economy Reporter Junho Hwang] As consumer sentiment shifts from revenge spending to revenge leisure, there is a growing outlook that stocks in the entertainment, media, and leisure sectors deserve close attention.

Kihoon Lee, a researcher at Hana Financial Investment, stated, "Due to asset value increases caused by COVID-19 and revenge psychology, consumption of tangible goods such as home appliances, furniture, and automobiles has surged significantly." Spending on home appliances rose from 14.3 trillion KRW in 2019 to 21.8 trillion KRW last year (+53%), while furniture jumped from 3.5 trillion KRW to 5.4 trillion KRW (+153%).

However, he predicted, "Considering that replacement cycles for high-priced items like TVs, sofas, and automobiles are at least 4 to 5 years, consumption will again focus on leisure activities such as travel and concerts through 2024." Due to the spread of COVID-19, combined spending in the travel transportation and cultural leisure sectors decreased by 48%, from 20.4 trillion KRW in 2019 to 10.6 trillion KRW in 2021.

Prices in the travel transportation and cultural leisure sectors are already rising sharply. Live Nation reported that concert ticket prices have increased by 20% compared to 2019. Korean dramas are also seeing increases in production costs, recoupment rates, and the number of episodes, supported by proven references. Movie theaters have implemented a 40% price increase over the past two years, and travel product prices have surged 50-100% due to seat supply shortages on airline routes expected to normalize only in the second half of next year. Casinos have confirmed steep increases in per capita drop amounts even in the mature U.S. market.

The researcher stated, "In response to these changes, we recommend 'Studio Dragon,' which is experiencing increased production volume and recoupment rates due to intensified OTT competition, and 'Hana Tour,' which will benefit from overseas travel demand deferred for over two years, as top picks." He added, "Due to the globalization of fandoms, we suggest JYP and SM as secondary picks, given their record-high performance in 2021 and the resumption of tours and rookie group debut cycles."