[Click eStock] "JYP Entertainment Expected Base Effect on Earnings in First Half of Next Year... Target Price Up"

On the 27th, a researcher at Korea Investment & Securities evaluated JYP Entertainment, stating that due to a low base in the first half of this year, quarterly earnings are expected to improve until the first half of next year. Accordingly, the investment opinion was maintained as 'Buy,' and the target stock price was raised to 81,000 KRW.

Researcher Ando Young from Korea Investment & Securities said, "From an investment perspective, the main interests are the upside of Stray Kids' world tour, the possibility of resuming activities in China, and strategies for rookie debuts and low-experience lineups," adding, "Both earnings and sentiment are improving simultaneously."

First, Stray Kids announced their North America, South America, and Europe tour schedules last week, and this week they announced additional shows for stadium concerts in three cities. Based on the announced schedule, the estimated tour scale is 1.5 million people, nearly three times the size of their previous tour, reaching the level of top performers in the existing concert sector such as BLACKPINK and TWICE.

Researcher Ando evaluated, "The proportion of stadium concerts is high, so the scale per show is the largest," and added, "Dynamic pricing in North America and excess revenue from RS could become factors for future earnings surprises. Although the scale may not be large, there is also the possibility of additional performances."

Secondly, he noted that sentiment in the entertainment sector has improved recently due to the allowance of visa-free entry to China. Researcher Ando stated, "It is uncertain whether this will actually lead to permission for performances in China, but if performances are allowed, quick shows and audience gathering will be possible."

Lastly, he predicted that next year, alongside the growth of high-experience lineups like Stray Kids, the growth of low-experience lineups will also be highlighted. Researcher Ando said, "Next year, a boy group targeting China will debut, and a Latin girl group project will also begin," forecasting, "Balanced growth of both high-experience and low-experience lineups will result in increased sales next year."

He added, "The margin impact from the application of re-contract rates due to leverage effects from external growth will not be significant."