Hive Hits Bottom, Preparing to Leap Again

[Asia Economy Reporter Ji Yeon-jin] HYBE is preparing to leap again. The corporate value, which plummeted in June when BTS declared a halt to group activities, is gradually recovering. Although cautious sentiment remains due to concerns about a 'peak-out' in earnings following the announcement of record-breaking Q2 results earlier this month, the perception that the bottom has passed is spreading amid the rise of rookie artists including NewJeans and expectations for new business ventures.

On the 26th, HYBE started trading with a firm tone, maintaining the mid-170,000 KRW range. After BTS announced the suspension of group activities around June 15, the corporate value plunged, hitting a post-listing low of 138,000 KRW on June 23, but has since recovered 24.37% in just over two months. HYBE's stock price continued to decline amid the US's tightening monetary policy and delayed reopening due to the resurgence of COVID-19. However, the Q2 earnings announced earlier this month showed sales increased by 85% year-on-year to 512.2 billion KRW, and operating profit soared 215% to 88.3 billion KRW. During this period, album sales of affiliated artists reached 8.53 million copies, reflecting performances such as BTS's Las Vegas concerts and SEVENTEEN's fan meeting in Japan. It is also analyzed that foreign exchange gains from the recent strong dollar boosted earnings. These results exceeded market expectations.

However, expectations and concerns about HYBE are mixed in the market. On the positive side, rookie groups such as LE SSERAFIM, who debuted in May, and NewJeans, who debuted in July, have set the highest album sales records among rookie groups, and new businesses like digital album releases are gaining attention as new growth engines driving HYBE's performance. The new business game 'In the SEOM with BTS' was successfully launched, generating daily sales of about 200 million KRW so far, which is also a positive factor for the stock price.

On the other hand, some securities firms have lowered their target prices by adjusting annual earnings estimates excluding BTS revenue, given HYBE's high dependence on BTS sales. KB Securities lowered HYBE's target price by 20.0% from 350,000 KRW to 280,000 KRW earlier this month, and Cape Securities also reduced it from 300,000 KRW to 270,000 KRW.

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