[Click eStock] "HYBE, Historic Band Bottom... Clear Earnings Recovery"

4Q Operating Profit Expected to Approach 100 Billion KRW
Seventeen and Others Achieve Record Quarterly Attendance in World Tour
Performance Growth and Stock Price Momentum Expected to Strengthen

Yuanta Securities maintained a 'Buy' rating and a target price of 300,000 KRW for HYBE on the 10th, citing clear signs of recovery in performance driven by the expansion of global tours, platform business growth, and new artists. HYBE's closing price on the previous trading day was 201,500 KRW.

According to Yuanta Securities, HYBE's revenue for the fourth quarter of 2024 is expected to reach 661.4 billion KRW, an 8.7% increase year-on-year, with operating profit rising 1.2% to 90.2 billion KRW. This outlook largely aligns with market consensus. The expansion of world tours and a reduction in new business expenses are anticipated to drive the improvement in earnings.

Specifically, the world tours of Seventeen, Tomorrow X Together (TXT), and Enhypen are projected to attract over one million attendees, marking the highest quarterly figure in history. In particular, a rise in the sales ratio of tour-related merchandise (MD) is expected to result in significant growth in the MD segment. In the fourth quarter, Seventeen attracted 740,000 attendees across Korea, the United States, and Japan, while TXT and Enhypen drew 185,000 and 240,000 attendees respectively.

Album sales are estimated at approximately 11 million copies, with music streaming revenue expected to increase by 10% compared to the previous quarter. In the content segment, variety shows, documentaries, and the 2025 season's greeting sales featuring BTS members Jungkook and Jimin are also expected to contribute to earnings. Notably, BTS's comeback and the growth of the localized group ‘Cats Eye’ are anticipated to be key drivers of performance improvement. Additionally, in 2025, HYBE plans to sequentially launch three new artist groups in Korea, Japan, and Latin America, creating new momentum.

Researcher Lee Hwan-wook of Yuanta Securities stated, "By reducing cost burdens in the gaming and platform new businesses, HYBE is expected to record the highest operating profit margin of the year." He added, "The current price-to-earnings ratio (PER) is below 30 times, positioned at the lower end of the historical band, and the momentum for earnings growth and stock price appreciation is expected to strengthen."