[Click eStock] "YG Target Price Raised on 'BLACKPINK Revenue Effect'"

On May 28, Hana Securities stated that it expects an upward revision in YG Entertainment's earnings, reflecting increased management revenue from BLACKPINK and anticipated growth in MD (merchandise) sales in the second half of the year. The firm maintained its 'Buy' investment rating and raised its target price by 25% to 110,000 won.

Hana Securities projected YG's operating profit for this year at 71.5 billion won, which is approximately 30% higher than its previous estimate. This figure is significantly higher than the initial projection of 40 billion won at the beginning of the year. Lee Kihun, an analyst at Hana Securities, stated, "We continue to recommend increasing the weighting, and present YG as a second-preferred stock within our coverage."

He forecasted, "The scale of BLACKPINK's world tour this year has doubled per concert compared to last year, and considering additional scheduled performances, the cumulative audience could exceed 2 million." He added, "In the second half, YG's tour audience is expected to be at least 1.5 million, and assuming per capita MD sales of 50,000 won with an improved MD strategy, second-half MD revenue could reach 7.5 billion won." He emphasized, "Given that the average quarterly MD revenue in the first half of last year was around 1.6 billion won, this represents more than a twofold growth in just one year."

He also viewed the activities of rookie groups as having a positive impact. Lee explained, "In the second half of this year and next year, TREASURE and BABYMONSTER will each release two albums annually, a new boy group will debut, and four members of a new girl group will be confirmed and release solo tracks." He added, "In the medium to long term, to address the issue of slow album release pace, YG is overhauling its internal system so that multiple IPs can release albums and promote simultaneously."

He concluded, "As seen in the series of large-scale earnings surprises, it is worth continuing to watch how YG will change going forward."