[Click eStock] SM, Artist Achievements Expected Next Year as Well

Source: SM

[Asia Economy Reporter Junho Hwang] Samsung Securities maintained the target price for SM at 95,000 won on the 20th, stating that the strong performance of major artists will continue to drive the core business next year.

Samsung Securities forecasted that the fourth-quarter sales last year would reach 191 billion won, a 3.7% increase from the previous year, and operating profit would soar 1264.1% to 18.4 billion won. The market expectation for operating profit is around 24.2 billion won.

However, albums such as NCT's 3rd album "Universe" (1.63 million copies), NCT127's repackage album "Favorite" (930,000 copies), and Aespa's mini-album "Savage" (570,000 copies) received positive responses in the market, resulting in domestic album sales of affiliated artists reaching 4.32 million copies, showing improved performance compared to the previous quarter (3.77 million copies) and the same period last year (3.61 million copies).

NCT127 marked the resumption of offline concerts by holding a three-day offline concert at Gocheok Dome from December 17 to 19. SM has changed the bonus settlement method to semi-annual reflection, and considering the strong performance last year, there is a high possibility of additional incentives being reflected in the fourth quarter of last year as well.

Among consolidated subsidiaries, SM C&C saw increased profit contributions during the peak season in the fourth quarter last year. KeyEast is expected to improve its performance with the airing of two dramas, and , simultaneously on Netflix. DearU is understood to have continued its steady performance growth based on the number of paid subscribers.

Next year, SM is expected to demonstrate the continued strength of fandoms centered around NCT, which has firmly established its market presence, as well as Aespa, Super Junior, and EXO. The metaverse/NFT business is also expected to materialize related projects next year. KeyEast, a major subsidiary, is expected to improve its performance this year due to an increase in production volume, and DearU is projected to show stable profit growth due to an increase in subscribers following the expansion of its artist pool.

Minha Choi, a researcher at Samsung Securities, said, "The clear expansion of major artists' achievements will continue to support the core business next year," adding, "If related achievements in the metaverse business, such as the launch of 'Meta-Passport,' are actively materialized, it will bring additional profits."

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