[Click eStock] YG Entertainment, Blackpink's Value "Concert Tour, Ticket Power Expected"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] Daishin Securities initiated coverage on June 6 with a new buy rating on YG Entertainment, setting a target price of 84,000 KRW. The target price was calculated by applying a 34x price-to-earnings ratio (PER) to the 12-month forward earnings per share (EPS) of 2,476 KRW. The PER reflects a discounted average of the 2018?2019 PERs of the top three domestic entertainment companies. The years 2018?2019 marked a period when the global growth of domestic entertainment companies became visible. As K-pop's global activities have resumed actively after emerging from the impact of COVID-19, the PER from that period was adopted.

On the 16th, BLACKPINK will release their second full-length album, "BORN PINK." Pre-orders have already exceeded 2 million copies before the release. On the 19th, the pre-release single "Pink Venom" was unveiled. The "Pink Venom" music video (MV) achieved over 10 million views within one hour and more than 80 million views within 24 hours. This pace is faster than any previous MV released by BLACKPINK. It is judged that the global fandom has expanded further. This is why a record-breaking album sales performance is anticipated. Album sales are expected to exceed approximately 2.7 million copies. Lee Ji-eun, a researcher at Daishin Securities, noted, "Following the album release, the concert tour, which will be the largest among girl groups, is expected to drive YG Entertainment’s performance through the first half of 2023."

Expectations for the concert tour are particularly high. The reason the concert tour is anticipated even more than the new album sales is because BLACKPINK is a global intellectual property (IP). While many K-pop artists conduct overseas tours, concerts by major artists like BTS and BLACKPINK are on a different scale. The currently announced BLACKPINK world tour is scheduled to hold 36 performances across 26 cities in 19 countries from October this year through June next year. The venues include arenas, domes, and stadiums. Additional concert dates are expected to be announced later, with a total expected audience size of 1.5 million people. From the second half of this year through the first half of next year, YG Entertainment’s concert revenue is estimated at 64.2 billion KRW, with BLACKPINK’s share estimated at around 80%.

Although the company carries a single IP risk due to BLACKPINK’s high revenue share, it is judged that the power of a global IP can sufficiently offset this risk. This is expected to be proven through overseas tours. For reference, HYBE’s BTS reportedly generated over 190 billion KRW in revenue from just 20 performances during their six-month world tour in 2019. In contrast, in the second half of 2022, HYBE’s three boy groups?Seventeen, ENHYPEN, and TXT?conducted overseas concert tours with a combined total of 60 performances, yet ticket sales revenue, excluding online concerts, is expected to be only about 60 billion KRW. Ultimately, concert ticket power is judged to be achievable only by global big IPs.

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