[Practical Finance] K-pop Trained Through Internal Competition... Dominating the Global Entertainment Industry

Hive, SM Entertainment, YG Entertainment, and JYP Ent Global Competitiveness
Improving Performance Through Album Releases, Concerts, and MD Product Planning

As the popularity of K-pop spreads worldwide, the stock prices of domestic entertainment companies are also soaring. The growth of the four major Korean entertainment companies?HYBE, SM Entertainment (SM), YG Entertainment, and JYP Ent.?is fierce. K-pop, with its perfectly established idol group training system, is a globally competitive sector from an entertainment industry perspective. K-pop has grown attractively in terms of investment value by expanding group and concert-related revenues in various ways and creating a performance improvement structure through comeback timing adjustments.

HYBE's stock price has risen about threefold compared to last year's lowest point (107,000 KRW). Recently, Goldman Sachs released its first analysis report on HYBE. The investment opinion was "Buy," with a target price of 376,000 KRW. Goldman Sachs analyzed, "HYBE is the largest agency holding multiple of the industry's strongest intellectual properties (IP), including BTS," adding, "It generates direct revenues from albums and concerts, as well as indirect revenues through effective use of the Weverse platform for MD products and content." Goldman Sachs expects positive investment sentiment for the entire related industry to continue due to the rapid growth of K-pop artists.

Kyobo Securities evaluated that HYBE artists such as SEVENTEEN and LE SSERAFIM are exceeding market expectations, and not only album sales but also music streaming growth is encouraging. In the third quarter, album releases from V, NewJeans, and TXT are expected. In the fourth quarter, albums from Jungkook, SEVENTEEN, ENHYPEN, and LE SSERAFIM are scheduled. The multi-label system with multiple IPs and a "two comebacks per year" strategy has significantly reduced quarterly performance volatility compared to the past. During the third quarter, HYBE plans to launch the "Weverse Membership," which includes various services such as "Weverse DM" for HYBE artists.

SM's stock price has also doubled compared to last year's lowest point (60,700 KRW). aespa is maintaining its lead in the fiercely competitive 4th generation girl group market. As of May this year, aespa recorded album sales of 1.7 million copies, 440,000 copies ahead of the runner-up LE SSERAFIM's 1.26 million. Concert attendance is expected to reach 350,000 this year, the third year since their debut, which is comparable to BLACKPINK's 370,000 during the same period. In the second quarter, solo albums from NCT's DoJaeJung and Taeyong, as well as comebacks from aespa and SHINee, took place. Global tours by NCT DREAM, TVXQ, aespa, and Red Velvet are also ongoing. Accordingly, second-quarter album sales increased by 33% year-on-year to 50.07 million copies, and concert attendance rose by 58% year-on-year to 830,000, with both indicators approaching record highs. Up to three teams are planning to debut in the second half of the year. A boy group including former NCT members Sungchan and Shotaro, as well as SM Rookies members Eunseok and Seunghan, is preparing for a second-half debut. A reality show on Japanese media will finalize the NCT Tokyo member lineup in the second half. One girl group is also preparing to debut within the year.

YG Entertainment is experiencing strong performance across all business sectors due to BLACKPINK's world tour. Additionally, IP diversification is rapidly progressing with the highlighted growth of TREASURE and BABYMONSTER. As artists' systematic activities enable 2 to 3 comebacks per year, dependence on a single IP is expected to decrease rapidly. TREASURE's initial album sales volume declined, lowering expectations, but it has recently been reappraised. Previously minimal back catalog sales have been steadily occurring since the beginning of the year, accumulating 135,000 copies by May. Kyobo Securities researcher Park Sung-guk said, "In the K-pop industry, artists whose back catalog sales increase tend to achieve good results in their next comeback, so attention should be paid to TREASURE's upcoming comeback performance." BABYMONSTER's YouTube subscribers have surpassed 2.9 million, approaching the 3 to 4 million subscribers of major 4th generation girl groups before their debut in the second half. Park predicted, "The current unbroken record for K-pop debut album first-week sales is X1's 524,000 copies in August 2019, and BABYMONSTER is likely to break this record after four years."

JYP Ent.'s Stray Kids (SKZ) achieved first-week sales of 4.62 million copies for their third album, surpassing SEVENTEEN's 4.55 million and BTS's 3.38 million, ranking first in K-pop. Stray Kids' third full album "★★★★★" (Five-Star), released this month, achieved their third No. 1 on the Billboard main album chart "Billboard 200." In the second half of this year, concerts by Stray Kids and TWICE are scheduled. Accordingly, record-breaking performance is expected to continue from the first quarter through the second to fourth quarters. Album sales in the second half are projected to increase 66% year-on-year to 13.88 million copies, and concert attendance is expected to rise 136% year-on-year to 1.01 million. In the music industry, JYP is seen as making rapid progress in the North American market by establishing a local subsidiary, JYP USA, and partnering with major local label Republic Records. JYP is also conducting a global girl group debut project "A2K," led by CEO and producer Park Jin-young, targeting English-speaking countries such as the U.S. and Canada in collaboration with Republic Records.

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