[Special Stock] Signal of 'Hanhanryeong' Lift?…K-Pop and K-Drama Related Stocks Surge

SM breaks 100,000 won on Hallyu Ban Lift Expectations
K-pop and K-drama Producers Rise Together
Improved Sentiment in Entertainment Stocks, Further Gains Expected

Stocks related to K-pop and K-drama entertainment companies are rising simultaneously. This is interpreted as reflecting news that the unofficial regulation known as the 'Hanhanryeong' may be lifted.

From the top left clockwise: HYBE, SM, YG, JYP headquarters
[Photo by Kang Jin-hyung, Asia Economy; provided by SM, YG, JYP]

As of 9:28 a.m. on the 27th, SM is trading at 99,900 won, up 9.78% (8,900 won) from the previous close. It reached a high of 100,700 won shortly after the market opened. This is the first time since November last year that SM's stock price has exceeded 100,000 won. It had been trading below 100,000 won throughout this year.

Not only SM, but K-pop entertainment companies such as YG Entertainment (4.18%), HYBE (2.74%), Cube Entertainment (5.19%), and JYP Ent. (3.36%) are all rising. It is not just K-pop. K-drama production companies are also rising together. CJ ENM, which operates both K-drama and K-pop businesses, is trading at 94,400 won, up 6.07%, marking a 52-week high. Astory (6.53%), RaemongRaein (4.65%), and NEW, a film distribution and drama production company (2.97%), are all rising as well.

Recently, it was reported that the China National Tourism Administration approved a special Beijing performance in July by the domestic rock band Say Sue Me. Say Sue Me is an indie band based in Busan. It is rare for Chinese authorities to allow a domestic singer to hold a 'solo concert' in Beijing. Although not explicitly prohibited by law, no K-pop artist has performed in mainland China since the deployment of THAAD. This is due to the unofficial regulation known as the 'Hanhanryeong.' Korean dramas and movies have disappeared from Chinese broadcasts and can only be viewed on online platforms.

The expectation that the Hanhanryeong may be lifted due to this performance approval appears to have influenced investor sentiment. Kim Hyun-yong, a researcher at Hyundai Motor Securities, explained, "It is the first time in 8 to 9 years that a Korean singer is performing in mainland China, leading to a surge in stock prices amid expectations that benefits will spread to K-pop idol groups. SM, which holds the most popular artists in China such as aespa, NCT, and EXO, saw the largest increase."