[Hot Stock] SM Surges Over 10% on News of Parting Ways with Like Planning

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] SM is showing a sharp rise in early trading on the 16th following news that it is considering the early termination of its contract with Like Planning, led by Chief Producer Lee Soo-man.

On this day, SM started trading at 76,300 KRW, up 16.74% from the previous day, and recorded an intraday increase of over 10%. As of 9:08 AM, the stock price was trading at 72,800 KRW, up 12.71% (8,200 KRW).

SM announced yesterday that it is reviewing the early termination of the producing contract with Like Planning. SM stated, "We have been conducting multifaceted reviews and discussions regarding the producing contract with Chief Producer Lee Soo-man, and the Chief Producer has expressed his intention to the company to terminate the producing contract early by the end of this year." It added, "We plan to hold in-depth discussions with key stakeholders about the impact of the early termination of the producing contract with the Chief Producer on our business and will organize our position on the future direction to announce later."

Accordingly, there are forecasts that SM's corporate value could rise to 3 trillion KRW.

Hana Securities presented a target market capitalization of 3 trillion KRW reflecting SM's operating profit forecast of 170 billion KRW for next year if the producing contract with Like Planning is terminated. However, since this operating profit is not yet confirmed, applying a 20% discount rate based on JYP's corporate value, Hana Securities raised SM's target stock price to 110,000 KRW.

Lee Ki-hoon, a researcher at Hana Securities, explained, "After large-scale amortization and tax audits on subsidiaries in 2019-2020, there has been a clear structural improvement with the sale of real estate by non-operating subsidiaries, the high growth of Dear U, and the start of the first dividend. If the contract with Like Planning is also terminated, governance issues will be resolved as well."

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