[Beginner's Guide] After Secondary Batteries, Enter Stocks... Should You Ride the Leading Stocks to Make Money?

Editor's Note[Beginner's Guide to Stock Investing] is a smart investment guide for 'Joorini' (stock + beginner). We will kindly and easily explain stock stories that are unfamiliar to Joorini.

Recently, there are stocks leading our stock market.

JYP Ent., YG Entertainment, SM Entertainment (SM), HYBE.

These are the 'Entertainment Stocks'.

Investors' attention has shifted from secondary battery stocks, which heated up our stock market earlier this year, to entertainment stocks.

There is a saying that you have to ride the leading stock to make money,

so let's take a look at whether entertainment stocks can become the new leading stocks of our stock market.

JYP Ent.'s Q1 'Surprise Performance'

Singer and JYP Entertainment's largest shareholder Park Jin-young saw the value of his stock holdings surge to over 600 billion KRW as JYP's stock price soared.

JYP's stock price has risen more than 30% just this month.

The reason behind this was JYP Ent.'s Q1 'surprise performance'.

JYP Ent. posted consolidated sales of 118 billion KRW in Q1 this year, a remarkable 74.3% increase compared to the same period last year.

JYP recorded sales exceeding 100 billion KRW for two consecutive quarters.

Operating profit also achieved 42 billion KRW, up 119% compared to the same period last year, marking an 'earnings surprise'.

Following the Q1 earnings announcement, JYP's stock price even rose as much as 21% intraday.

With the stock price showing strength day after day, JYP Ent. impressively climbed to 6th place in market capitalization on the KOSDAQ market.

In the securities industry, target prices for JYP Ent. are being raised one after another.

All 10 securities firms that issued stock reports on JYP Ent. after the earnings announcement raised their target prices.

Researcher Lee Hwa-jung of NH Investment & Securities analyzed, “With the strengthening of earnings power due to the expansion of new market positions for key lineups including TWICE, expectations are rising as promotional content for the American girl group (A2K) will be released at the end of this month. We have entered a phase where the artist development system is being exported to Western countries.”

Researcher Jung Ji-soo of Meritz Securities explained, “The American girl group project to be released via online streaming at the end of this month is not just an addition of new IP but an important event that can suggest success in the U.S. market and the possibility of valuation upgrades. This will mark the beginning of a full-scale attack on the U.S. local market.”

Next Secondary Battery or Entertainment Stocks?

It's not just JYP.

All four major entertainment stocks are showing strength day after day.

Leading JYP Ent., YG Entertainment, SM, and HYBE all recorded simultaneous gains.

YG Entertainment also hit new highs along with JYP.

As entertainment stocks show strong performance together, there is an evaluation that they are not just some stocks or themes but a new industry category leading the stock market and the leading stocks of our stock market.

Until now, entertainment stocks were only mentioned as reopening-related stocks expected to benefit from the revival of performances due to reopening of the economy,

but expectations are spreading that the entertainment industry, including the export of idol development systems and intellectual property (IP) due to the expansion of the K-pop market base, will become a new leading industry in our market.

Researcher Ji-in Hye of Shinhan Investment Corp. analyzed, “Now is the era of exporting technology related to intangible assets. The growth momentum such as the idol development system unique to Korean entertainment companies, systematic fandom management, and secondary revenue generation using goods and platforms will continue for a long time.”

What Are Leading Stocks?

Entertainment stocks are receiving great expectations as new leading stocks of our stock market.

Leading stocks are not simply stocks whose prices rise.

The stock price must continuously rise while sales and operating profit steadily increase.

Also, they must be an industry (company) representing an era.

Do you remember when 'Cha-Hwa-Jeong' (Automobile, Chemical, Refining) showed strength?

At that time, stocks like Hyundai Motor, which were considered leading stocks, saw both earnings and stock prices rise together, sustaining this major uptrend for about two years.

Like this, stocks that lead our stock market for a long time with corporate fundamentals, stock price, and not just short-term strength are called leading stocks.

Leading stocks have the characteristic of recording higher returns than the market average and not falling even when the market undergoes corrections.

Dear Joorini,

When secondary battery stocks led the market heated by companies like EcoPro,

did you suffer from FOMO (Fear Of Missing Out), feeling left out of the rising market?

Some investors may have been caught at the peak trying to join the secondary battery rally late.

There are always stocks that rise even in a falling market.

Instead of regretting stocks that have already left, how about discovering new industries and stocks that will lead our stock market ahead of time?

From secondary batteries to entertainment stocks, and from entertainment stocks to whatever stocks come next,

one thing is certain: just as seasons cycle, there are no stocks that rise forever or fall forever in our stock market.

We support your wise investments today as well, and conclude this article here.

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This article is from [Beginner's Guide to Stock Investing], published weekly by Asia Economy. It explains stock-related financial news and difficult economic stories in an easy and friendly way so that stock beginners can understand. By clicking subscribe, you can receive articles for free.

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