[Click eStock] JYP Entertainment, Q2 Earnings Decline... Target Price Lowered to 76,000 Won

Meritz Securities downgraded the target price of JYP Entertainment (JYP Ent.) from 79,000 KRW to 76,000 KRW on the 14th. The investment rating was maintained as 'Buy.'

Kim Min-young, a researcher at Meritz Securities, stated in the report on the same day, "We maintain the 'Buy' rating and lower the target price by 3.7% from 79,000 KRW to 76,000 KRW due to changes in earnings estimates reflecting increased cost ratios and rising expenses."

JYP Entertainment's consolidated sales for the second quarter were 95.7 billion KRW, and operating profit was 9.3 billion KRW, significantly below the market consensus of 21.6 billion KRW.

Researcher Kim Min-young analyzed, "Sales declined due to the absence of activities from major artists with large fandoms, but other costs including manufacturing costs of JTP360 (5 billion KRW) increased, resulting in a cost ratio of 65.2%. One-time decreases of 3.4 billion KRW in financial and other expenses led to a net profit of 1.3 billion KRW."

Sales for this year are projected at 554 billion KRW. This estimate reflects increased artist activities in the second half, expanded global recognition, and deferred sales recognition. In the second half, active promotions are planned for existing IPs such as TWICE, Stray Kids, ITZY, and NMIXX, and three new rookie boy groups are scheduled to debut.

Researcher Kim said, "This is a critical time to have confidence in the growth of low-experience IPs," adding, "Starting with NMIXX's comeback on the 19th, the performance of rookie groups debuting within the year is expected to be an important event."