JYP Shows Better Performance Outlook Compared to Competitors... "Profit Margin to Increase in Second Half"

SK Securities Estimates Q1 Earnings with Revenue of 25.7 Billion KRW and Operating Profit of 5.6 Billion KRW

Girl group ITZY under JYP Ent. (Photo by Asia Economy DB)

[Asia Economy Reporter Geum Boryeong] JYP Entertainment (JYP Ent.) is expected to record better performance compared to its competitors, with analysis suggesting that profit margins will become more prominent in the second half of the year.

According to SK Securities on the 3rd, JYP Entertainment's first-quarter results this year are estimated at 25.7 billion KRW in sales and 5.6 billion KRW in operating profit. This represents a 2% decrease in sales and a 3% decrease in operating profit compared to the previous year.

Although ITZY's comeback performance is favorable, the impact of COVID-19 has made it inevitable to lower estimates due to cancellations such as TWICE's Japan dome concerts and domestic performances, as well as GOT7's Southeast Asia tour.

However, compared to competitors, stable performance is expected. This is because TWICE's Japan tour related to their second full album from the fourth quarter of last year was recognized in the first quarter of this year, enabling performance defense.

In the second quarter, TWICE's Japan tour results from the first quarter will continue to be reflected. ITZY's album has also shown positive responses by selling over 100,000 copies. Researcher Yuseongman from Hyundai Motor Securities said, "With music and album sales from major artists including GOT7 added, good performance is expected compared to competitors even if offline concerts cannot be held," and added, "However, since JYP Entertainment has a relatively large proportion of Japan-oriented sales centered on TWICE, the speed of COVID-19 stabilization in Japan and the possibility of resuming local activities there are very important factors for second-half performance."

If COVID-19 stabilizes and Korea-China relations improve, opening the Chinese market, there is potential momentum for full-scale entry into the Chinese market centered on GOT7, which includes Jackson.

Analysis suggests that profit margins will stand out in the second half. SK Securities researcher Jeon Younghyun said, "The local idol group development project 'NIZI' currently underway in Japan will air season 2 on Japan's Nihon TV in the second quarter and is scheduled to debut in Japan this November," adding, "From the point when royalty income related to this artist's activities in Japan begins to be recognized, it is expected to enter a phase of additional operating profit margin increase." He continued, "ITZY's excellent comeback performance and the steadily growing fandom of Stray Kids indicate an expansion of profit contributions from younger artists in the future," and added, "This will act as a factor supporting JYP Entertainment's stable growth and profitability."

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