[Click eStock] 'Like BTS, Starting with the Eldest' Complete Group in 2025... HYBE Removes Uncertainty

[Asia Economy Reporter Lee Seon-ae] Samsung Securities evaluated that the biggest uncertainty, which had been the main cause of stock price volatility, has been resolved following HYBE's announcement on the 18th that BTS member Jin (Kim Seok-jin) will begin military enlistment, with other members enlisting sequentially.

After the market closed on the 17th, HYBE disclosed its position on BTS activities through a major management announcement related to investment decisions. The key point is that BTS has started concrete preparations to fulfill their military service obligations. The eldest member, Jin, plans to cancel his enlistment postponement application by the end of this month and will follow the Military Manpower Administration's enlistment procedures thereafter. Other members will also fulfill their military duties sequentially according to their individual plans. HYBE also mentioned that a shareholder letter has been sent.

According to the shareholder letter, HYBE and the members hope to resume full-group BTS activities in 2025. In the short term, some members have individual activities scheduled until the first half of 2023, and BTS plans to engage with fans through various pre-prepared content. Additionally, HYBE shared with the market the results and direction of its multi-label strategy.

Minha Choi, a researcher at Samsung Securities, stated, "This disclosure has resolved the long-standing noise and uncertainty regarding BTS's military enlistment." She added, "Although an exact timeline was not provided, it can be understood that after individual activities until the first half of next year, all members are likely to enlist to enable the full-group activities to resume in 2025."

She continued, "With the uncertainty causing stock price volatility resolved, the results of HYBE's strategies, which had been obscured until now, will act as the key to the stock price. BTS members have individual activities planned until the first half of 2023, and there are pre-produced contents such as photobooks, which are expected to minimize revenue impact. However, future growth will depend on the realization of the 'multi-label strategy' including debuting new artists, as well as the performance of new businesses such as platforms like Weverse, games, and NFT ventures." This year, LE SSERAFIM and NewJeans successfully established themselves in the market, and the influence of artists like SEVENTEEN, TXT, and ENHYPEN is also expanding.

Samsung Securities maintains a buy rating but lowered the target price by 15% to 178,000 KRW. This reflects unchanged earnings estimates for 2022 but factors in the debut of four new artist groups and fixed cost burdens in the 2023 earnings forecast.

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