'SM' Turning the COVID Crisis into New Business Opportunities

[Asia Economy Reporter Oh Ju-yeon] Hanwha Investment & Securities evaluated that SM has once again proven itself as the leading company in the entertainment industry by turning the current COVID-19 crisis into a new business opportunity.

On the 30th, Hanwha Investment & Securities analyzed that SM continued to achieve the highest music sales in the first quarter of this year (total 18.9 billion KRW, sales ratio 28%). SM's ambitious first local strategy group, 'Way V,' debuted in the first quarter of last year and achieved a slight profit in the first quarter of this year, just one year later.

Researcher Ji In-hae stated, "Despite having no concert performance records in China, the origin of COVID-19, since the end of last year, the results were achieved solely through various event appearances and advertising model activities," adding, "This is a very remarkable achievement."

In particular, it was explained that SM proved once again that it is the undisputed leading company in the entertainment industry through the new business opportunity brought by the COVID-19 pandemic: non-face-to-face (untact) performances, 'Beyond LIVE.'

Researcher Ji analyzed, "Comparing the revenue of general offline domestic arena-level performances and Beyond LIVE (NCT127), offline performances generated 2 billion KRW in sales and 500 million KRW in gross profit (GPM 25%), whereas Beyond LIVE generated 1.7 billion KRW in sales and 600 million KRW in gross profit (GPM 35%). Despite lower ticket prices and paying market and platform fees, there were no physical limitations in creating demand."

Researcher Ji added, "We maintain a buy recommendation as SM is a clear number one leading company in the entertainment industry attempting new business ventures, excellently navigating key investment points such as music growth, overseas fandom expansion, and localization strategy." However, reflecting the decrease in artist activities due to COVID-19, earnings forecasts have been lowered, and the target stock price is set at 38,000 KRW.

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