[Click eStock] "YG Entertainment, Long-Awaited 'BLACKPINK' Positive News"

Kiwoom Securities Report

[Asia Economy Reporter Minji Lee] Kiwoom Securities maintained a buy rating and a target price of 78,000 KRW for YG Entertainment on the 19th. This is based on the analysis that profitability will significantly improve in the third quarter due to BLACKPINK's comeback.

As of the previous day, pre-orders for BLACKPINK's second full-length album have exceeded 1.5 million copies. The teaser for the music video "Pink Venom" has reached 18.87 million views, increasing the likelihood of success not only in album sales but also for the world tour starting in October. Despite being the first announcement, the world tour has pre-opened 36 shows in 26 cities through the first half of next year.

Namsoo Lee, a researcher at Kiwoom Securities, explained, "In the third quarter, sales will expand in various areas such as albums and content, and from the fourth quarter onward and into the first half of next year, concerts and merchandise will contribute to revenue growth. The world tour starting on October 15 is confirmed to attract 1.5 million attendees (compared to BLACKPINK's 2019 world tour with 500,000 attendees), and profitability is also expected to improve."

In the second quarter, Big Bang's comeback led to strong digital single sales, resulting in operating profit exceeding market expectations. Although sales fell 9% year-on-year to 76 billion KRW, operating profit grew 3% to 9.3 billion KRW.

BLACKPINK's album sales are estimated to exceed 2.5 million copies, surpassing their first full album (the first K-pop girl group to achieve million-seller status) and the level of K-pop groups that released albums this year. With album prices set between 20,000 and 60,000 KRW, it is also expected to realize economies of scale with the highest sales volume ever.

Researcher Lee said, "It is true that momentum was damaged in the first half due to BLACKPINK's delayed comeback and Big Bang's inactivity. However, considering the intensity of K-pop girl group popularity, the fandom mix in North America and Europe will further enhance BLACKPINK's performance." He added, "With Treasure's comeback in the second half and the debut of a new girl group in the first half of next year, it is expected to achieve up to four consecutive quarters of year-on-year growth."