[Click eStock] "JYP Entertainment, Focus on Stray Kids' Growth... Target Price Up 35%"

KB Securities Report

[Asia Economy Reporter Minji Lee] KB Securities maintained a buy rating on JYP Entertainment (JYP Ent.) on the 1st and raised the target price by 35.4% from the previous level to 65,000 KRW. The accelerated growth pace of Stray Kids, now in their 4th year since debut, and the resumption of offline performances due to the implementation of the post-COVID-19 policy were cited as the reasons for the upward revision of earnings estimates.

JYP Entertainment's consolidated sales for the third quarter are analyzed to reach 55 billion KRW, a 59% increase compared to the same period last year. Operating profit is estimated to record 18.8 billion KRW, up 69%, in line with market expectations (17.6 billion KRW). KB Securities analyst Seonae Lee said, “With all affiliated artists including Stray Kids, TWICE, DAY6, ITZY, and 2PM releasing albums, domestic sales alone reached 2.05 million copies,” adding, “The strong performance is expected as album and digital music sales postponed from the second quarter are also reflected.”

JYP Entertainment achieved record-high album sales in the third quarter, with Stray Kids selling 1.39 million copies and becoming a million-seller in their 4th year since debut. Analyst Lee explained, “Top-tier male idols typically become million-sellers in their 4th to 5th year, and JYP Entertainment has produced the next generation male idol continuing this legacy,” adding, “Not only their sales but also increased recognition are expected to drive revenue growth through world tours, merchandise, goods, and content.”

The rich pipeline of rookie artists is also positive. A blind package (girl group) is scheduled to debut in February next year, the Loud Project (boy group) and Studio J (boy band) are planned for debut in the first half of next year, and in 2023, after airing the NiziU boy group project, a debut in China is planned. Analyst Seonae Lee stated, “JYP Entertainment announced its entry into the NFT business with Dunamu based on its abundant artist IP, and momentum is expected for new business ventures along with strengthening the artist pipeline in the future.”

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