[Click eStock] "BLACKPINK·TREASURE Riding the Wave... YG Could Achieve Best 4Q Performance in 2 Years"

Already Breaking the Record for Highest Album Sales Since Debut
Expectations for Sales Growth from Concert Tour and Related MD Products↑

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] There are expectations that YG Entertainment's performance will show a full-fledged recovery. The popularity of new releases from BLACKPINK and TREASURE is increasing sales in China, and with the easing of the COVID-19 pandemic, there is optimism that concert revenues may also materialize.

On the 13th, Hana Financial Investment forecasted that YG Entertainment would achieve sales of 58.1 billion KRW and an operating profit of 2.5 billion KRW in the third quarter of this year. Although sales decreased by 6% compared to the same period last year, operating profit turned positive. This also represents a clear recovery compared to the previous quarter, which recorded sales of 55 billion KRW and operating profit of 1.8 billion KRW.

For the fourth quarter, operating profit is expected to reach 8.2 billion KRW, marking the highest performance in the past two years. The surge in album sales led by BLACKPINK is analyzed to drive this strong performance. Kihoon Lee, a researcher at Hana Financial Investment, explained, "BLACKPINK and TREASURE's single albums were reflected once and twice respectively, selling 810,000 copies, which is the highest sales volume even compared to annual standards. Considering BLACKPINK's full album (1 million copies), TREASURE's two releases, and Song Minho's solo, album sales are expected to reach 1.73 million copies, and BLACKPINK's sales in China are anticipated to surge." Since its founding, YG Entertainment's highest annual album sales had been 800,000 copies.

In 2022, when full concerts are expected to be possible, sales are projected at 394.1 billion KRW with an operating profit of 59.1 billion KRW. The market consensus sales estimate is also in the 410 billion KRW range. The researcher stated, "After China's ban on Korean content (Hanhanryeong) in 2017, annual sales were 350 billion KRW, but adding the sales of VIBE, a new business by subsidiary YG Plus (40 billion KRW), brings it to 390 billion KRW. Since there were no BLACKPINK albums in 2017, just adding BLACKPINK and TREASURE's album sales would sufficiently exceed this." Furthermore, adding revenues related to BLACKPINK's management (tours, appearance fees, merchandise, etc.) would further increase the scale.

Against this backdrop, Hana Financial Investment maintained a 'Buy' rating on YG Entertainment and raised the target price by 6.7% to 64,000 KRW. The closing price the previous day was 47,600 KRW. The researcher predicted, "While global album sales are declining by about 20%, K-pop's sales per album are growing more than twice. The growth in album and digital sales of BLACKPINK and TREASURE will lead to tour growth, and profit margin improvements will inevitably appear due to secondary copyright growth such as related merchandise (MD)."

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