[Click eStock] "HYBE, Weverse Platform Growth Becomes Visible... Target Price Up"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained its buy rating on HYBE on the 6th and raised the target price by 1% from the previous level to 360,000 KRW.

HYBE reported first-quarter sales of 178.3 billion KRW, a 29% increase compared to the same period last year, and operating profit of 21.7 billion KRW, growing about 9%. Although the operating profit slightly missed market expectations (24.8 billion KRW), it appears to have achieved sales exceeding 100 billion KRW without any artist comebacks.

By segment, only TXT's comeback in Japan was reflected, resulting in album and music sales of 54.5 billion KRW (-33%), showing weakness. However, the MD and licensing segment grew 89% to 64.7 billion KRW, and indirect sales such as content and fan clubs increased 123% year-on-year to 110.8 billion KRW.

Researcher Kihoon Lee of Hana Financial Investment explained, "Excluding one-time costs (5 to 10 billion KRW) related to the relocation of the new headquarters, name change, and mergers and acquisitions, operating profit could exceed approximately 30 billion KRW. In the second quarter, BTS's return and increased activities of artists are expected, and considering one-time costs related to the Ithaca Holdings acquisition and capital increase (estimated 5 billion KRW), operating profit of 34 billion KRW is anticipated."

HYBE has four teams with the highest album sales based on debut year (BTS, Seventeen, TXT, ENHYPEN). Additionally, Ithaca Holdings, which includes Justin Bieber and Ariana Grande, YG Entertainment with BLACKPINK and BIGBANG, and UMG plan to implement various content through the Weverse platform.

Researcher Lee said, "Based on the strongest label alliance ever, various solutions utilizing IP will be realized through the Weverse platform. Even with just the entry of four groups per year and the integration of V Live, indirect sales exceeding 200 billion KRW per quarter will be achieved."

He added, "Entertainment agencies have also conducted various businesses utilizing artists' IP, but most were based on offline spaces. Although most were not successful, HYBE has overcome these limitations and realized them through an online platform."

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