[Click eStock] "Entertainment Sector Expected to Show Clear Performance Improvement in Q2"

On May 22, IBK Investment & Securities analyzed that entertainment companies are expected to continue improving their performance in the second quarter.

In the first quarter, the combined revenue and operating profit of HYBE, SM, JYP Entertainment, and YG Entertainment reached 973 billion KRW and 83.4 billion KRW, respectively, marking increases of 20.9% and 47.5% compared to the same period last year.

Kim Yu-hyeok, a researcher at IBK Investment & Securities, explained, "Although album sales were sluggish in the first quarter, strong growth in concert and MD sales led to solid results. Net profit improved significantly as gains from the transfer and valuation of DearU and SM were reflected in non-operating income."

IBK Investment & Securities projects that the combined operating profit of the four major entertainment companies in the second quarter will reach 174.8 billion KRW, up 136.2% year-on-year. Kim stated, "With the comeback of long-running IPs concentrated in this period, album sales are expected to grow significantly. The combined album sales volume of the four companies in the second quarter is projected to reach 19.7 million units, an increase of 13.5% from the same period last year, and concert performance is expected to reach 211 shows with an estimated audience of about 3.6 million people."

Kim maintained an "overweight" recommendation on the entertainment sector, expecting growth to continue, particularly driven by concerts and MD sales. He added, "With BTS scheduled to complete their military service in June and BLACKPINK set to make a comeback in July, further improvement in investor sentiment is anticipated. The combined operating profit of the four entertainment companies for this year is expected to reach 719.6 billion KRW, up 89.7% from last year."