[Featured Stock] HYBE Falls for Second Day Amid BTS Group Activity Hiatus Despite Solo Impact Expectations

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] HYBE has been on a decline for the second day due to the suspension of group activities of its representative artist BTS. The lowered stock price targets from securities firms are also increasing downward pressure on the stock price.

As of 9:21 a.m. on the 16th, HYBE is trading at 141,500 KRW, down 2.41% from the previous trading day. The stock price fell below 140,000 KRW early in the session, reaching as low as 139,000 KRW.

HYBE has closed lower for four consecutive trading days from the 10th to the previous day. Uncertainties regarding BTS's military enlistment and the suspension of activities have combined to cause the stock price to drop by 36.3% during this period. It plunged nearly 25% in just one day. HYBE's market capitalization shrank by about 2 trillion KRW, from 7.9812 trillion KRW on the 14th to 5.9549 trillion KRW on the 15th.

On this day, NH Investment & Securities lowered HYBE's target stock price by 29.5%, from 440,000 KRW to 310,000 KRW. Researcher Lee Hwajeong of NH Investment & Securities said, “Reflecting the uncertainty of BTS group activities, we have downgraded the earnings estimates for the music division and, considering recent macroeconomic uncertainties, lowered the platform division's target price-to-earnings ratio (PER) from 80 times to 65 times.”

Hyundai Motor Securities also lowered its target price by 28.8%, from 400,000 KRW to 285,000 KRW. Researcher Kim Hyunyong of Hyundai Motor Securities explained, “The end of BTS's full-group activities has been brought forward by six months compared to initial expectations, making the second half tour virtually impossible. Reflecting this, we lowered this year's operating profit forecast from 324 billion KRW to 225.3 billion KRW and consequently lowered the target stock price.”

However, it was predicted that the performance gap caused by BTS's military enlistment would not be as excessive as the market fears. He evaluated, “In terms of album sales, it is possible to sell more than 8 million units annually through unit and solo activities alone, covering over 90% of the 2021 sales volume. Additionally, although it is too early to calculate the coverage ratio for performances at this point, considering the global drawing power of Big Bang's solo activities alone, BTS solo and unit tours are expected to have even greater impact.”

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