[Click eStock] "YG Entertainment, The Increasingly Important Performance of the Younger Siblings"

Korea Investment & Securities analyzed on the 22nd that the future stock price direction of YG Entertainment will be determined by the profit levels of TREASURE and Baby Monster.

Andoyoung Ahn, a researcher at Korea Investment & Securities, stated in a report on the same day, "Due to the decrease in BLACKPINK's activities and the increased burden of amortization expenses for exclusive contract fees, operating profit this year is expected to decrease by 36% compared to the previous year." However, he forecasted, "With the expected increase in activities of TREASURE and Baby Monster, the reliance on a single IP will be reduced compared to before, even during BLACKPINK's future active periods."

Researcher Ahn explained, "TREASURE has already confirmed more performance dates (including fan meetings) until August this year than the total number of performances throughout last year, and the number of album releases, which was once last year, will increase to twice this year." He added, "Baby Monster is also conducting a global fan meeting tour starting in May after their mini-album release in April, and additional album activities are expected in the second half of the year."

However, he said, "We lowered the earnings estimates by reflecting the larger-than-expected intangible asset amortization expenses and postponed the assumed start of BLACKPINK's tour from the end of this year to next year." He also noted, "Assuming BLACKPINK's album release in the fourth quarter, the future stock price direction will be determined by the profit levels that TREASURE and Baby Monster can achieve without BLACKPINK's contribution until then."

He continued, "Although there is still significant annual earnings uncertainty depending on BLACKPINK's activities, considering the earnings including BLACKPINK's activities next year, we believe it is appropriate to maintain a buy rating." He emphasized, "In the short term, expectations for Baby Monster's mini-album release on April 1 may continue to be reflected in the stock price, but caution is needed regarding the increased stock price volatility after the release."