[Click eStock] "Cube Entertainment Expected to See Stock Price Momentum If China Ban Is Lifted"

On June 5, NH Investment & Securities evaluated Cube Entertainment, stating, "Now that the contract renewal issue with the main artist has been resolved, the stock price is expected to gain even more momentum if the ban on Korean cultural content in China is lifted." The company did not provide an investment opinion or a target price. The previous day's closing price was 17,300 won.

On this day, Kang Kyungkeun, a researcher at NH Investment & Securities, said, "At the end of last year, Cube Entertainment completed the contract renewal with its main artist, (G)I-DLE, alleviating related concerns."

Since their debut in May 2018, (G)I-DLE has seen a sharp increase in annual album sales since 2022, establishing themselves as a million-seller artist. Their second full-length album, '2', released last year, recorded first-week sales of 1.53 million copies, ranking fifth among all girl group albums in terms of first-week sales. In particular, (G)I-DLE is expected to be very active in China if the ban is lifted, given their high recognition in the country. Last year, (G)I-DLE achieved two annual chart-topping records on Tencent Music in China.

Kang noted, "Yuqi, a member of (G)I-DLE, holds Chinese nationality and has the highest number of Weibo followers among female idols." He continued, "Yuqi ranks first with 10,719,000 followers, far surpassing Yoona with 5,966,000, Jennie with 3,889,000, and Ningning with 1,401,000. She has been selected as a model for various advertisements in China, including Adidas, and is also appearing on popular variety shows."

In the first quarter, Cube Entertainment recorded sales of 41.3 billion won, down 16.6% year-on-year, and an operating loss of 900 million won, turning to a deficit. Kang explained, "Album and digital sales declined due to the absence of group activities by artists, and expenses related to contract renewals also played a role."

He added, "Performance is expected to improve from the first quarter low. Last month, (G)I-DLE's mini album 'We are' recorded first-week sales of 1.06 million copies, and the group is scheduled to hold their first solo concerts in Japan four times in the fourth quarter. Since group activities are set to resume next year, the direction for performance improvement seems clear, so attention should be paid to the second half of this year."