JYP's Strong Q1 Performance Outlook Despite COVID-19

[Asia Economy Reporter Jang Hyowon] JYP Entertainment (JYP Ent.) is expected to achieve strong first-quarter results despite concert cancellations due to the novel coronavirus (COVID-19). This is because the performance generated in Japan in the fourth quarter of last year will be reflected in the first quarter of this year.

According to financial information firm FnGuide on the 12th, JYP Entertainment's consolidated first-quarter sales consensus (average market forecast) is expected to reach 27.9 billion KRW, a 5.68% increase compared to the same period last year. Operating profit is also projected to grow by 8.62% to 6.3 billion KRW.

Since the beginning of this year, various countries have imposed a complete ban on gatherings such as events and concerts due to COVID-19. The U.S. Centers for Disease Control and Prevention (CDC) prohibited events with more than 50 people for eight weeks starting from the 13th of last month. In Japan, domestic singers are canceling performances due to the ban on foreign entries.

As a result, the entertainment industry as a whole is expected to experience poor performance in the first quarter. However, once COVID-19 subsides and restrictions on large-scale events are lifted or demand for commercial flights recovers, performance is expected to normalize.

However, in JYP's case, the accounting method that reflects TWICE's activities in Japan from the fourth quarter of last year in the first quarter results means the impact is expected to be relatively minor.

Park Seongho, a researcher at Yuanta Securities, analyzed, "The performance from TWICE's second full-length Japanese album release and tour in the fourth quarter of last year will be reflected in the first quarter of this year, which can significantly offset the revenue losses from canceled or postponed concerts."

Additionally, there is an opinion that JYP Entertainment's simple corporate structure makes it advantageous to withstand COVID-19.

Lee Hyojin, a researcher at Meritz Securities, stated, "JYP Entertainment has a simple group structure consisting only of Japanese and Chinese subsidiaries that support artist activities, so even if COVID-19 prolongs, the related cost burden is low," and added, "We are upgrading our investment opinion from Hold to Buy."

This content was produced with the assistance of AI translation services.