[Click eStock] "YG, Target Price Up... Blackpink Recontracting Is a Variable"

Daishin Securities raised the target price for YG Entertainment (YG) by about 8%, from 64,000 won to 69,000 won on the 20th, citing expected performance improvements this year. However, as the contract expiration date for the major girl group Blackpink approaches, the renewal decision is expected to act as a variable for the stock price.

YG recorded sales of 125 billion won and an operating profit of 15.7 billion won in the fourth quarter of last year. Although these figures represent increases of 40% and 18% respectively compared to the same period last year, they fell short of market expectations. In particular, album sales sharply declined by 71% from the previous quarter to 6.4 billion won. This is analyzed to be due to lower-than-expected additional sales of Blackpink’s fourth-quarter albums and Treasure’s second mini-album sales.

In the first quarter of this year, there are no newly released albums, so related sales are expected to drop significantly compared to the previous quarter. Concert sales are also expected to decrease by 23% from the previous quarter to 14.4 billion won, reflecting the Treasure Japan concert and Blackpink Asia tour that were deferred to the fourth quarter of last year.

However, with Blackpink member Jisoo’s solo album release scheduled for the 31st, along with the Blackpink world tour and Treasure Asia tour, sales this year are expected to grow compared to last year. The projected sales for 2023 are 435 billion won, an 11% increase from last year, and operating profit is expected to rise by 33% to 62.1 billion won.

Lee Ji-eun, a researcher at Daishin Securities, said, "The contract expiration date for Blackpink is August 2023, and the uncertainty regarding the renewal possibility of Blackpink, which currently accounts for the largest portion of the company’s sales, is expected to be a factor that increases stock price volatility. We recommend responding to the stock price while confirming the possibility of contract renewal."