[Click eStock] JYP Entertainment, the Most Undervalued Agency... Target Price Raised

91,000 KRW → 94,000 KRW
Operating Profit Expected to Grow 14% Next Year

Hana Securities raised the target price for JYP Entertainment from 91,000 KRW to 94,000 KRW on the 28th, expecting operating profit growth next year. The investment rating was maintained as 'Buy.'

Yonhap News

Lee Ki-hoon, a researcher at Hana Securities, stated in a report released that day, "Considering that the consensus for operating profit in the planning agency industry for 2024 has fallen by about 50% over the past year, this is the first time in a long while that profit upgrades have resumed." He added, "Although the stock price rose 37% in just two weeks after the earnings announcement, based on the upgraded profit standards, it is still only about 20 times the expected price-to-earnings ratio (P/E) for 2025, and surprisingly, it remains the most undervalued planning agency."

He continued, "From a relative perspective, despite the operating profit margin being more than twice that of SM, JYP receives a similar valuation, which indicates significant undervaluation." He said, "Taking into account the upward revision of the 2025 earnings per share (EPS), we raise the target price to 94,000 KRW (up 21%) and present it as a top pick along with HYBE."

Researcher Lee also noted, "Recently, Stray Kids announced their North and South America stadium tour, which far exceeded market expectations. The initial announcement was for 20 shows in 20 cities, and assuming an average of 50,000 attendees, that amounts to about 1 million people." He added, "If dome tours in Korea, Japan, and other locations are added in the second half of next year, the tour scale is expected to be about double this year’s, reaching approximately 1.6 to 1.8 million attendees."

Operating profit is expected to grow by 14% next year. He explained, "In the previous 2025 outlook, concert revenue was assumed to remain at the 2024 level, reflecting a conservative approach due to the deferral of Japanese concert revenue, which was a factor in the poor performance in the second half of last year, to the first half of this year." He further explained, "However, the scale of Stray Kids’ North and South America stadium tour greatly exceeded expectations, and as it is the first large-scale South American performance, we can expect maximization of tour-linked merchandise sales. Additionally, in North America, large-scale revenue sharing (RS) is anticipated due to dynamic pricing."