[Click eStock] "JYP, Target Price Down 8%... Buying in Oversold Zone Remains Valid"

Lack of Short-Term Upward Momentum... Oversold Zone Buying Strategy
"Concerns Over Initial Decline Market Are Excessive"
Worsened Sentiment in Entertainment Industry Expected to Gradually Improve

On the 5th, Korea Investment & Securities lowered the target price for JYP Ent. (JYP) by 8%, from 163,000 KRW to 150,000 KRW, following a revision in the outlook for album sales volume. The investment rating of 'Buy' was maintained.

Andoyoung Ahn, a researcher at Korea Investment & Securities, said, "JYP showed the weakest stock performance among the four major entertainment companies this year, following the comebacks of ITZY and NMIXX in January," adding, "Although it is unfortunate that there is no momentum for a short-term improvement in investor sentiment, we recommend a strategy of continuous buying in the current oversold zone."

The first-week album sales (initial sales) of ITZY and NMIXX, released in January, decreased by 61% and 40%, respectively, compared to their previous works. Researcher Ahn stated, "Although market concerns are strong, this is not due to a reduction in fandoms, which form the basis of earnings. Rather, attention should be paid to the fact that JYP has recorded annual earnings estimates exceeding expectations at the end of January for three consecutive years recently,” and “Although investor sentiment across the entertainment sector is currently poor, it is expected that the atmosphere will gradually turn around as quarterly earnings announcements demonstrate continued growth."

JYP's operating profit for 2024 is expected to be 217.3 billion KRW, a 15.7% increase from the estimated 182 billion KRW in 2023. Researcher Ahn said, "We anticipate profit growth in the performance, MD, IP licensing, and advertising sectors," adding, "The annual target for album releases has doubled compared to the previous year, aiming for more than 20 releases, and considering the recently lowered expectations for album sales, the downside risk in the album sector has decreased." Particularly, the expected highlight for this year's earnings is Stray Kids' world tour. Compared to the past, the scale of venues has expanded, and with the addition of European performances (expected), the performance regions will broaden, leading to improved profitability.

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