[Click eStock] "HYBE, Expecting Earnings Growth in the Second Half"

Shinhan Investment Corp.

Shinhan Investment Corp. maintained its buy rating and target price of 330,000 KRW for HYBE on the 4th, considering momentum such as NewJeans' comeback in the second half of the year and BTS Jungkook's solo debut.

The company's sales in the second quarter are expected to reach 599.9 billion KRW, marking the highest quarterly performance. Album sales accounted for approximately 11 million copies. Based on new releases, this includes 5.6 million for Seventeen, 1.6 million for ENHYPEN, 1.5 million for LE SSERAFIM, 1.3 million for SUGA's solo, and cumulative sales from GOOBO. Albums, as the main IP, generate high margins and it appears that the highest album sales volume in history has been recognized. Concert revenue was also generated from TXT and SUGA's world tours.

However, profits are estimated to have decreased compared to the first quarter. In the first quarter, high-margin IP accounted for a large portion of sales, but in the second quarter, sales with lower margins such as performances made up a higher proportion. The Weverse Con held on June 10 and 11 recorded a slight loss.

One-time costs are also expected to be reflected. This is due to events commemorating BTS's 10th anniversary, which focused more on celebration and fan service rather than monetization, resulting in significant cost burdens. Ji Inhae, a researcher at Shinhan Financial Investment, analyzed, "The increase in costs and deterioration in profitability are not due to structural issues," and added, "If there were no event costs, expectations would have been met."

In the second half of the year, HYBE's flagship artists are scheduled to make comebacks. NewJeans will return on the 6th, and Jungkook's solo debut will take place on the 14th. TXT, who embarked on a world tour in the first half, will also make a comeback with a new album, and Seventeen plans to hold a Japan tour twice as large as last year. LE SSERAFIM will hold a solo world tour just over a year after their debut.

Researcher Ji Inhae said, "The Weverse platform, which has expanded its business, will start monetization in the third quarter, and the release of audition videos for a U.S. girl group will soon follow," adding, "Considering the clearest strategies and directions, as well as a harmonious sales portfolio of IP and performances, we maintain our 'top pick' rating."

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