Institutions Recently Show 'Love for Entertainment Stocks'

Expecting Profits from Concert Resumption News
Top 3 Entertainment Stocks Rank 1st, 3rd, and 5th in Net Buying

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] Institutional investors have been aggressively buying stocks in the entertainment sector since the end of last month. This is interpreted as rising expectations for profitability improvement following the news of large-scale offline concerts resuming after being halted for two years due to the COVID-19 pandemic.

According to the Korea Exchange on the 7th, institutions purchased 64 billion KRW worth of SM Entertainment shares on the KOSDAQ from the 27th of last month to the 6th of this month. JYP Entertainment and YG Entertainment were also net buyers with 40 billion KRW and 28 billion KRW respectively. These amounts correspond to the 1st, 3rd, and 5th highest net purchases by institutions. On the KOSPI, institutions also net bought HYBE shares worth 64.2 billion KRW.

During the same period, stocks in the entertainment sector also experienced an upward trend. SM (23.3%), JYP (8.8%), HYBE (5.6%), and YG (22.3%) all saw increases. This contrasts with the domestic stock market where the KOSPI index fell sharply, breaking below 3,000 points. As of 10 a.m. on the day, SM (3.20%), JYP (3.15%), HYBE (2.30%), and YG (4.48%) were all rising together.

The strong performance of entertainment stocks is analyzed as reflecting expectations for profitability improvement through the resumption of offline concerts in the With-Corona era. The government is preparing to transition to a With-Corona policy by next month. BTS is preparing for a full-scale offline North American tour starting in California, USA, at the end of next month. This will be BTS's first offline performance in about two years since their Seoul concert in October 2019.

In the securities industry, it is recommended to increase the weighting of entertainment stocks as beneficiaries of the gradual normalization of the global entertainment market. Additional revenue is expected not only from offline concerts but also from online performances that have been activated due to COVID-19.

Ji Inhae, a researcher at Hanwha Investment & Securities, said, "If the resumption of global offline concerts becomes a reality, an additional growth of over 30% compared to the concert performance we previously knew is expected," adding, "Hybrid products that add online elements to offline concerts are likely to be developed for signature performances that attract attention by country." Park Hakyeong, a researcher at Korea Investment & Securities, emphasized, "Online content and merchandise derived from offline performances are expected to drive profitability."

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