[Click eStock] "YG Entertainment, BLACKPINK and TREASURE to Lead Q3"

Hyundai Motor Securities Report

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] Hyundai Motor Securities maintained a buy rating on YG Entertainment (YG Enter) on the 26th and lowered the target price by 4% to 75,000 KRW from the previous level. This adjustment was made due to lowered earnings expectations following the rescheduling of BLACKPINK's comeback.

The company's second-quarter earnings are expected to show a slight decline, mainly driven by activities of WINNER and iKON. From the third quarter onward, strong earnings momentum is anticipated as BLACKPINK and TREASURE's activities ramp up. BLACKPINK plans to release a full-length album in July, followed by a large-scale global tour. TREASURE will also release their second album this year and has confirmed an arena tour consisting of 17 shows from November through early next year. Accordingly, the expected operating profit for the third quarter is 19.5 billion KRW, and for the fourth quarter, 18.6 billion KRW, representing growth of 12.5% and 40.4% year-over-year, respectively.

BLACKPINK is projected to record initial sales of 800,000 to 1,000,000 copies for their first full-length album in a year and a half (compared to 630,000 copies for their previous album), with third-quarter sales reaching 1.6 to 2 million copies (compared to 1.26 million copies in the previous album's quarter). Additionally, the tour is expected to exceed the scale of their 2019 tour (32 shows, 340,000 attendees), with an estimated 40 shows and 500,000 attendees. Hyundai Motor Securities analyst Hyunyong Kim stated, “Both ticket prices and minimum guarantees have increased by 50% to 100% compared to pre-COVID levels, making a surprise strong performance in the second half highly likely.”

TREASURE, in their 18th month since debut, released an album in February this year that recorded initial sales of 540,000 copies, laying the foundation for entering the top tier. Compared to TXT, which took 26 months, and Stray Kids, which took 41 months to surpass initial sales of 500,000 copies, TREASURE's pace is considered quite rapid. Furthermore, their Japanese albums released in the first quarters of last year and this year each sold about 70,000 copies, approaching the 100,000 mark.

Analyst Kim explained, “TREASURE is expected to sell over 1.5 million albums and attract more than 150,000 concertgoers this year, and combined with BLACKPINK's effect in the second half, a significant year-over-year profit increase is anticipated.”