[Click eStock] "YG Entertainment, Q2 Earnings Expected to Fall Short... Target Price ↓"

NH Investment & Securities forecasted on the 4th that YG Entertainment's second-quarter earnings will fall short of expectations. Accordingly, they maintained a 'Buy' investment rating but lowered the target price to 57,000 KRW.

Researcher Lee Hwajeong of NH Investment & Securities stated, "The consolidated sales for the second quarter are expected to decline by 35% year-on-year to 103.3 billion KRW, and operating profit is projected to plunge 76% to 6.9 billion KRW, falling short of consensus."

Lee explained, "Considering the aggressive promotions related to Baby Monster, which seem to delay the monetization timing somewhat, and the low likelihood of improving the release cycle of existing artists' new albums, we have significantly lowered our earnings estimates."

Lee analyzed, "Activities were diverse, including Baby Monster's debut new album (600,000 copies) and seven fan meeting tours, as well as Treasure's nine arena tours, but the initial cost burden related to Baby Monster was inevitable." The purpose of fan meetings is generally more about securing fandom rather than generating revenue.