[Click eStock] HYBE, BTS Military Service Uncertainty Weighs on Stock Price... Clear Growth in 2Q

[Asia Economy Reporter Kwon Jaehee] NH Investment & Securities maintained its 'Buy' rating on HYBE on the 4th, while lowering the target price by 6% from the previous level to 440,000 KRW.

HYBE's consolidated sales for the first quarter of this year were 285 billion KRW, and operating profit was 37 billion KRW, representing increases of 60% and 63% respectively compared to the same period last year, but slightly below market expectations. This is attributed to the absence of artist activities and a lagging effect in MD sales.

Sales related to BTS's Seoul concert are estimated at around 50 billion KRW, and sales related to the LA concert are estimated at 60 billion KRW. Although audience restrictions were inevitable due to social distancing measures, additional revenue was secured through simultaneous online and theater broadcasts. By category, offline sales are estimated at 6.5 billion KRW, online sales in the high 20 billion KRW range, and theater sales in the mid-10 billion KRW range. The Las Vegas concert scheduled for the second quarter is expected to generate sales similar to the LA concert.

However, the sluggishness in MD sales is notable, which appears to be due to poor MD releases caused by the absence of artist activities and the fact that more than half of BTS's MD production sales were lagged into the second quarter. In the second quarter, all artists are scheduled to release new albums, so a definite growth trend is expected not only in music and album sales but also in MD sales.

Researcher Lee Hwajeong of NH Investment & Securities analyzed, "Although the recent stock price trend has been sluggish due to uncertainties related to BTS's military service, the expansion of online hybrid, high growth of low-experience lineups, and the start of new businesses are diversifying revenue sources, so the impact on performance will be limited despite the absence of BTS activities."

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