[Click eStock] "SM, the Center of Reopening"

Growing Artist Lineup Expected to Contribute to Growth
Kiwoom Securities "SM Target Price Raised from 78,000 Won to 90,500 Won"

[Asia Economy Reporter Gong Byung-sun] SM (Esuem) is being identified as a reopening-related stock as it revealed plans for offline concerts. It is expected to achieve greater growth next year compared to this year, supported by the rebound of its subsidiaries.

On the 25th, Kiwoom Securities estimated SM's third-quarter sales at 154.7 billion KRW, a 34.% increase compared to the same period last year, and operating profit at 14 billion KRW, turning positive during the same period. These figures are 1.78% and 19.54% below the market consensus estimates of 157.5 billion KRW and 17.4 billion KRW for sales and operating profit, respectively.

However, SM is attracting attention as a reopening-related stock along with the "With Corona" phase, which signifies a gradual return to normal life. Since offline concerts have not been held for the past two years due to COVID-19, deferred demand is expected to lead to explosive box office success.

In particular, the grown artist lineup is anticipated to contribute to future growth. Namsoo Lee, a researcher at Kiwoom Securities, explained, "The global success of NCT will contribute to monetization both domestically and internationally," adding, "In addition to a solid rookie lineup, activities of groups with highly concentrated fandoms such as Super Junior, Dong Bang Shin Ki, and EXO can resume at any time."

Performance next year is expected to surpass this year. Growth of SM's subsidiary DearU will be reflected next year, in addition to concerts and dramas. DearU, a fan communication platform, showed steep growth with sales of 18.4 billion KRW in the first half of this year, already surpassing last year's total sales of 13 billion KRW. Album sales are also expected to continue an upward trend due to the growth of both existing and rookie artists.

Accordingly, Kiwoom Securities maintained a "Buy" investment rating for SM. The target price was raised from 78,000 KRW to 90,500 KRW. The closing price on the 22nd was 75,100 KRW.

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