[Click eStock] "HYBE, More Promising Earnings Ahead... Target Price Up"

[Asia Economy Reporter Song Hwajeong] KB Securities on the 1st raised the target price for HYBE from the previous 360,000 KRW to 430,000 KRW, expecting the company to continue achieving record-breaking performance this year. The investment rating was maintained as 'Buy.'

Lee Seonhwa, a researcher at KB Securities, explained, "Starting with BTS's North America tour in the 4th quarter, offline concerts have fully commenced, and ticket prices have increased based on the heightened recognition of the artists, which has been reflected in the earnings estimates." She added, "The main reason for raising the target price is the upward revision of the operating profit growth rate estimate from 30.2% to 38.7% for 2021 to 2023."

Although HYBE's 3rd quarter earnings this year are expected to fall short of market consensus, record-breaking performance is anticipated. The researcher said, "HYBE's consolidated sales for the 3rd quarter are expected to increase by 80.3% year-on-year to 342.5 billion KRW, and operating profit is expected to rise by 64.6% to 66.1 billion KRW." She added, "Although operating profit is expected to fall short of the consensus of 73.3 billion KRW, it is positively evaluated as a record high performance." BTS and TXT released albums domestically, selling approximately 5 million copies, and the performance is expected to reflect Seventeen's online fan meeting, In the SOOP BTS·Seventeen edition, BTS McDonald's MD, and MUSTER Soowoozoo fan meeting MD, leading to record-breaking results. Album, content, and MD·license sales in the 3rd quarter are expected to contribute to performance with increases of 191.2%, 273.2%, and 9.7%, respectively.

In the 4th quarter, record-breaking performance is expected again with BTS's North America tour (November 27 to December 2) and Seventeen's comeback (October 22). The researcher analyzed, "The average ticket price for BTS's North America tour is 170,000 KRW (75~450 USD), and it is estimated that about 300,000 tickets were sold for four performances (estimated sales of 51 billion KRW for four performances)." She added, "Seventeen's mini 9th album comeback, released on the 22nd of last month, sold 550,000 copies domestically and 160,000 copies in Japan within three days of release." KB Securities estimates HYBE's operating profit in the 4th quarter at 93.3 billion KRW, expecting the record-breaking annual sales of 1.3 trillion KRW in 2021 to continue.

Business expansion is also anticipated. The researcher said, "In the first quarter of next year, the integration of Weverse and V-Live is scheduled, and future platform evolution and expansion into metaverse and non-fungible token (NFT) businesses are expected."

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