'Institutional Love' Fuels Soaring Enter Stocks
Expectations for Performance Improvement... SM Hits 52-Week High, HYBE Rises for 7 Consecutive Trading Days
[Asia Economy Reporter Song Hwajeong] Entertainment stocks continue to show strong momentum as institutional buying persists. This is interpreted as institutional buying driven by expectations of improved performance in the second half of the year.
As of 9:10 AM on the 18th, SM traded at 55,800 KRW, up 800 KRW (1.45%) from the previous day. During the session, it rose to 58,100 KRW, setting a new 52-week high. SM has been on a four-day winning streak, continuously reaching new highs. HYBE also rose more than 2%, maintaining a seven-day consecutive upward trend. Due to its recent strength, HYBE touched 300,000 KRW during the previous session, reaching the 300,000 KRW mark for the first time since its listing day on October 15 last year.
JYP Ent. showed a strong gain of over 3% in early trading, continuing its upward trend for two consecutive days. YG Entertainment showed a slight increase, also maintaining a six-day consecutive rise. Since the beginning of this month, SM has risen by 25.86%, HYBE by 12.08%, YG Entertainment by 5.5%, and JYP Ent. by 3.03%, respectively.
Institutional buying has been sustained daily, driving the strength of entertainment stocks. Institutions have been net buyers of YG Entertainment for seven consecutive trading days recently, while HYBE has seen buying on two days this month, and JYP and SM have shown buying on all but three days each.
Expectations of improved earnings are cited as a factor behind the stock price increases. According to financial information provider FnGuide, SM’s Q2 earnings consensus forecasts sales of 164.1 billion KRW, up 20.75% year-on-year, and operating profit of 15.3 billion KRW, up 15.91%. HYBE is expected to post sales of 257 billion KRW and operating profit of 40.9 billion KRW, increasing 65.38% and 36.79% year-on-year, respectively. JYP is forecasted to see sales and operating profit rise 33.43% and 67.03% year-on-year, respectively, while YG Entertainment is expected to increase sales by 18.21% and operating profit by 127.78%.
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Researcher Lee Hwajeong of NH Investment & Securities said, "Despite concert tour suspensions due to COVID-19, the expansion of additional revenue sources such as artist-related merchandise (MD) and online content has maintained earnings growth. Since these expanded revenue sources are sustainable even after vaccination, the resumption of concert tours will act not merely as a return to normal operations but as an earnings upside."
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