[Click eStock] "HYBE, Growth Stock Appeal ↓ Due to Interest Rate Hikes Despite Reopening Benefits"

[Asia Economy Reporter Kwon Jaehee] IBK Investment & Securities maintained its 'Buy' rating on HYBE on the 7th but lowered the target price to 420,000 KRW. This is due to the expectation of quality growth this year with the full-scale reopening, but the attractiveness of growth stocks is declining amid the global interest rate hike trend.

IBK Investment & Securities forecast HYBE's consolidated sales and operating profit for the first quarter of this year at 357.1 billion KRW and 58.9 billion KRW, respectively. This represents increases of 100.2% and 158.7% compared to the same period last year. In particular, related MD and content sales are expected to grow by 54.9% and 232.9%, respectively, during the same period.

Researcher Lee Hwanwook of IBK Investment & Securities analyzed, "Despite the absence of new albums from major artists, performance and fan meetings are expected to drive earnings growth due to the reopening effect."

IBK Investment & Securities expects HYBE to achieve quality growth this year by resuming global tours in line with the reopening. First, an increase in audience numbers is anticipated due to the expansion of fandoms for the intellectual property (IP) of leading artists, and profitability is expected to improve significantly with the expansion of hybrid formats. The first global theater live viewing of BTS held in Jamsil last March set a new record with the largest audience, reaching 1.4 million viewers across 3,711 theaters in 75 countries worldwide, generating 40 billion KRW in global box office revenue.

Additionally, this year will see the full-scale expansion of IP for new female artists. The debut of the first girl group, Le Sserafim, is confirmed for May. Furthermore, the subsidiary label 'ADOR' plans to debut one new girl group within the year, which is expected to continuously reduce dependence on BTS in the mid to long term.

Researcher Lee stated, "The decline in the attractiveness of growth stocks due to the global interest rate hike trend has been reflected. However, considering the expected high earnings growth rate this year, diversification of the existing IP portfolio, and the potential success of high-margin new businesses, HYBE still holds high investment appeal."

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