[Click eStock] "JPY Enter, Earnings Visibility Declines Due to Deferred Accounting... Target Price Down"

NH Investment & Securities evaluated that JYP Entertainment (JYP Enter) has reduced earnings visibility due to frequent accounting deferrals on the 26th. Accordingly, the investment opinion was maintained as 'Buy,' but the target price was lowered to 73,000 KRW.

Researcher Ihwa Jeong of NH Investment & Securities stated, "The item with particularly frequent deferrals is the Japan tour," adding, "For conservative estimation, we adjusted the earnings forecast assuming that all revenue from the 22 scheduled Japan performances in the fourth quarter will be deferred." JYP Enter is known to defer accounting from as short as one quarter to as long as three quarters depending on the tour completion timing.

Meanwhile, on a consolidated basis for the third quarter, sales are expected to increase by 19% year-on-year to 166.1 billion KRW, and operating profit is expected to rise by 2% to 44.9 billion KRW, in line with consensus.

The researcher anticipated, "A dramatic profitability rebound is possible due to the new release effect of the main artist Stray Kids and the reflection of deferred sales (online sales of SKZOO popup MD in May)."