[Click eStock] "HYBE, Q2 Expenses Up... Target Price Lowered"

On April 26th, fans visiting the BTS pop-up store "BTS Pop-up: Monochrome," which opened in Seongdong-gu, Seoul, are touring the showroom. [Image source=Yonhap News]

On the 8th, Korea Investment & Securities downgraded its earnings forecast for HYBE due to increased expenses in the second quarter of this year, lowering the target stock price by 8% to 290,000 KRW. The buy rating was maintained.

On the same day, Ando Young, a researcher at Korea Investment & Securities, stated, "HYBE's second-quarter revenue is expected to increase by 15% year-on-year to 713.3 billion KRW, while operating profit is expected to decrease by 9% to 74.2 billion KRW, falling 21% short of market expectations."

He noted, "Although strong performances were anticipated due to active promotions of albums (Seventeen, TXT, NewJeans, etc.) and concerts (Seventeen, TXT, ENHYPEN, etc.), expenses are expected to be higher than initially projected. Significant costs were incurred for the debut of the global girl group CATS EYE, exceeding typical levels, and marketing expenses for the publishing game ‘Becoming the Star 2’ are also expected to surpass previous estimates considerably."

In the second quarter, album sales were generally strong except for TXT, which recorded its first decline. Seventeen demonstrated strong sales power by selling 3.5 million copies of their best album, priced at about twice the usual album price. Lower-tier groups BoyNextDoor and TO1 saw their initial sales increase by 18% and 97%, respectively, compared to previous releases. Although NewJeans experienced a decrease in sales per album, the release of two albums in the quarter led to a record high quarterly sales volume. Unit and solo albums by Seventeen's Jeonghan & Wonwoo and BTS's RM also consistently contributed to earnings. BTS Jin's solo album is expected in the fourth quarter, and a full BTS group album is anticipated next year.

Researcher Ando said, "Currently, the stock price faces significant uncertainty. There is a possibility that conflicts with Min Hee-jin, CEO of ADOR, may resurface." However, he added, "Starting with BTS Jin's album release in the fourth quarter, expectations for BTS's full group comeback are likely to be reflected. Around the same time, the Weverse subscription model will also begin sequentially opening by lineup."

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