Following JYP, Yang Hyun-suk Also Buys Company Shares... Is This a Signal of a Bottom for Entertainment Stocks?

Yang Hyun-suk Follows Park Jin-young in Buying Company Shares... "Enhancing Shareholder Value"
Entertainment Stocks Continue to Fall, Hitting New Lows Amid Poor Stock Performance
Recent Decline Excessive... "Expanding Sales Through Albums, Concerts, and Goods"

Major shareholders have stepped in as rescuers for entertainment stocks, which have fallen to their lowest levels of the year amid concerns over declining album sales. They showed confidence in the company's growth potential by purchasing treasury shares. The securities industry also views the recent stock price decline as excessive.

YG Entertainment announced on the 23rd that Chief Producer Yang Hyun-suk purchased 461,940 treasury shares (average price of 43,305 KRW) on the market starting from the 18th. The total purchase amount was 20 billion KRW. Yang Hyun-suk's stake increased from 16.8% to 19.3%. Earlier on the 18th, Park Jin-young, the largest shareholder of JYP Entertainment, purchased 60,200 treasury shares (average price of 83,000 KRW) on the market. The purchase amount was 5 billion KRW. His holding ratio rose from 15.22% to 15.37%.

YG Entertainment explained that the increase in Yang Hyun-suk's stake represents a firm commitment to the business and company growth. A YG Entertainment representative said, "We are intensifying our global rookie discovery and development project by selecting talents through auditions not only domestically but also overseas, aiming to debut at least one new group within this year." They added, "Through various activities of our artists and targeting the global market this year, we will secure new growth engines and continuously enhance shareholder value. This treasury share purchase by Chief Producer Yang Hyun-suk marks the beginning of such commitment and efforts."

This treasury share purchase is widely seen as an effort to enhance shareholder value amid the recent stock price decline. Entertainment stocks have shown continuous declines recently. HYBE recorded its lowest price of the year at 216,000 KRW on the 22nd. JYP Entertainment also dropped to 82,000 KRW on the 16th, and YG Entertainment fell to 40,800 KRW on the 17th, all reaching their lowest prices of the year so far.

The decline is attributed to sluggish album sales. Park Sung-guk, a researcher at Kyobo Securities, explained, "The cause of the stock price slump is the slowdown in growth due to negative growth in album sales. The decrease in K-pop album group purchases from China, which intensified since last September, is still having an impact."

However, the securities industry believes this stock price decline is excessive. Unlike in the past, entertainment companies can now aim to expand sales in various areas such as merchandise and concerts. Ji In-hae, a researcher at Shinhan Investment Corp., said, "For the peak out of albums to lead to the peak out of the industry, per capita fandom consumption would have to decrease, which does not seem likely. The decline in albums will not result in a decrease in total sales but rather a diversification of sales and fandom consumption across various categories, leading to overall sales growth."