[Click eStock] "YG Entertainment, 2Q Earnings Surprise... Blackpink World Tour Anticipation"

[Asia Economy Reporter Lee Myunghwan] Hana Securities announced on the 12th that it maintains a buy rating on YG Entertainment and has raised the target price from the previous 76,000 KRW to 80,000 KRW. This is due to the company's second-quarter earnings surpassing market expectations and increased anticipation for the world tour concert of its affiliated artist, 'BLACKPINK'.

YG Entertainment's consolidated sales for the second quarter of this year recorded 76 billion KRW, down 9% compared to the same period last year, and operating profit decreased by 11% to 9.3 billion KRW. The operating profit slightly exceeded the market forecast of 8.4 billion KRW. On a separate basis, operating profit increased by 16% year-on-year to 7.8 billion KRW, which Hana Securities evaluated as a strong performance.

The album sales were sluggish due to the absence of comebacks from major artists except iKON. However, Hana Securities estimated that the comeback of BIGBANG generated approximately 5 billion KRW in music sales in China alone, resulting in a performance surprise. YG Plus's operating profit recorded 2.5 billion KRW, down 8% year-on-year, with no notable issues, according to the analysis.

Hana Securities analyzed that the second half activities of BLACKPINK, an artist under this company, are highly anticipated. BLACKPINK plans two comebacks: a digital single in August and an album in September, while also announcing a world tour with an expected audience of 1.5 million. It was noted that there is a high possibility of additional dates being added to the world tour schedule. Considering BTS's album sales of 2.2 million and 3.7 million copies in 2018 and 2019 respectively, it is highly likely that BLACKPINK's album sales will fall within this range. Hana Securities assumed BLACKPINK's album sales in the third quarter to be 2.4 million copies.

Researcher Lee Kihoon of Hana Securities said, "With the simultaneous comebacks of BLACKPINK and TREASURE in the third quarter and the start of the world and Japan tours in the fourth quarter, record-high earnings will begin even without BIGBANG," adding, "The expected price-to-earnings ratio (PER) for 2023 is still only 22 times, so it is necessary to continue raising expectations until BLACKPINK's comeback."

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