Reopening Boosts Enter Stocks...Surprising Earnings Ignite Momentum

Group BTS under HYBE [Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] As performances and tours that were halted due to the COVID-19 pandemic resume, entertainment stocks are showing an upward trend.

As of 9:45 a.m. on the 24th, HYBE was trading at 286,000 KRW, up 1.78% from the previous day. HYBE, which was at 238,000 KRW earlier this month, has risen 18.28% until the previous day. Other entertainment stocks are also on the rise. SM Entertainment, YG Entertainment, and JYP Ent. showed increases of 15.11%, 22.33%, and 15.18%, respectively, during the same period.

Despite the stock market struggling due to the Ukraine crisis, the strength of entertainment stocks is attributed to expectations for reopening. Offline performances and tours have resumed, drawing attention. HYBE’s group BTS (Bangtan Sonyeondan) is scheduled to perform in Seoul from the 10th to the 13th of next month, and will hold four concerts in Las Vegas, USA, in April this year. The U.S. concerts will be their first in four months since the Los Angeles concerts in November-December last year. Additionally, JYP Ent.’s TWICE is conducting a North American tour starting with a concert in Los Angeles on the 15th of this month, and SM’s Red Velvet will hold solo concerts in Seoul on the 19th and 20th of next month.

Unexpected strong earnings, contrary to expectations of damage from the spread of COVID-19, are also analyzed as a factor for the rise. Despite concerns about an earnings shock, HYBE’s Q4 revenue last year was 459.8 billion KRW, and operating profit was 73.9 billion KRW, up 48% and 63% respectively compared to the same period last year. Revenue exceeded the market forecast of 384.4 billion KRW. YG Entertainment’s Q4 revenue also rose 7% year-on-year to 89 billion KRW, and operating profit surged 148%, greatly surpassing the estimated 4.9 billion KRW. Hyung-min Park, a researcher at Cape Investment & Securities, analyzed, “The main reason for YG Entertainment’s surprise is the reflection of 10.5 billion KRW investment gains from YG Investment and the digital content revenue recording higher-than-expected high growth.”

Furthermore, HYBE is expanding into new businesses such as content, gaming, and non-fungible tokens (NFTs). Hyun-yong Kim, a researcher at Hyundai Motor Securities, said, “Based on a solid cash cow in the entertainment business, they are rapidly expanding into high-growth new businesses. Besides NFTs entered through collaborations, the new businesses they are preparing independently include content (story), gaming, and commerce (consumer).”

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