[Click eStock] "YG Entertainment, Both Core Business and Investments Are Strong... Target Price Up 3.7%"

[Asia Economy Reporter Jihwan Park] KB Securities maintained a 'Buy' rating on YG Entertainment on the 1st, stating that the company is showing tangible results in both its core business and investments, and raised the target price by 3.7% from the previous 82,000 KRW to 85,000 KRW.

Researcher Sunhwa Lee of KB Securities said, "Along with the improvement of the business model of its subsidiary YG Plus, the solo activities of BLACKPINK members have continued, enriching the artist IP," adding, "The main reason for the target price increase is the upward revision of the estimated average annual operating profit growth rate from 21.5% to 23.1% for 2021E?2023E."

For the third quarter, YG Entertainment's consolidated revenue is expected to be 92.7 billion KRW, and operating profit 16.6 billion KRW, representing increases of 41.5% and 352.5% year-on-year, respectively. The operating profit consensus of 12.9 billion KRW is expected to be exceeded by 29.2%, achieving the highest quarterly operating profit ever, according to analysis.

In the third quarter, YG Entertainment's album sales reached 890,000 copies, of which 750,000 were Lisa's solo album. The four BLACKPINK members each have fandoms capable of supporting solo activities, and based on their IP, secondary creations such as MD and content can be produced, indicating significant growth potential. Researcher Lee said, "BLACKPINK joined Weverse in August to sell MD and shares various solo activity content on YouTube, contributing to the increase in indirect artist participation revenue for YG Entertainment," adding, "The subsidiary YG Plus is also expected to post strong results in the third quarter."

YG Plus's core business is also expected to perform well in the third quarter through the distribution of BTS's Butter and Lisa's solo LALISA albums and songs, as well as BLACKPINK MD sales. The researcher said, "The operating profit of subsidiary YG Plus alone is expected to reach about 12 billion KRW in the third quarter," and added, "With the addition of revenue from Lisa's solo activities and Akdong Musician's comeback activities, YG Entertainment is expected to achieve the highest operating profit ever."

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