[Click eStock] "Cube Entertainment, Strong Performance Expected Thanks to Well-Nurtured (G)I-DLE"

Kiwoom Securities Report

Kiwoom Securities analyzed on the 20th that Cube Entertainment is expected to expand its earnings due to the girl group (G)I-DLE achieving million-seller status and the expansion of their world tour.

Cube Entertainment's sales in the second quarter are expected to grow by 67% year-on-year to 47 billion KRW, and operating profit by 158% to 4.6 billion KRW. It is anticipated that (G)I-DLE and BTOB's comeback albums recorded the highest-ever quarterly album sales of over 1.3 million copies.

In the entertainment sector, sales are estimated to have reached 32.7 billion KRW, increasing by 142% during the same period. This is because (G)I-DLE's album achieved million-seller status. Additionally, sales from music streaming, advertising, content, and concerts are also expected to have expanded. Namsoo Lee, a researcher at Kiwoom Securities, stated, “The Japanese cosmetics business, which is simultaneously expanding offline stores and launching new products, will kick off performance improvements starting from the second quarter,” and analyzed, “We expect growth in the second half of the year.”

(G)I-DLE's initial album sales have noticeably increased since the first half of last year, expanding from 176,000 copies to 678,000 copies, and then to 1,163,000 copies. This has raised expectations for their comeback in the second half following their world tour. (G)I-DLE will hold 19 concerts in 11 countries by September. The seating capacity per concert has more than doubled compared to 3,000 seats last year, which is expected to improve profitability due to increased audience numbers. The expected audience size is projected to grow from 60,000 last year to 100,000 this year. This year, Europe, Thailand, and Hong Kong have been newly added to the countries hosting concerts, in addition to last year's locations (Korea, South America, the United States, Japan, and Southeast Asia).

Researcher Namsoo Lee explained, “If album sales increase significantly in the second half and Kubo sales are added, profitability improvement will be even more pronounced,” and added, “If performances in Southeast Asia, a strong region for K-POP, are added, earnings improvement will become even more certain.”

The company's expected sales for this year are 165.6 billion KRW, and operating profit is 15.7 billion KRW, representing increases of 37% and 126% respectively compared to the previous year. Researcher Namsoo Lee evaluated, “With (G)I-DLE's growth, BTOB's solid fandom, and the debut of a new boy group, the entertainment pipeline is expected to be strengthened,” and added, “Thanks to performance improvements in cosmetics and other sectors, it is time for the company’s earnings capacity to be upgraded.”