[Click eStock] "HYBE, Opportunity to Increase Share from Q4 This Year"

Hana Securities forecasted HYBE's operating profit in 2026 to be approximately 500 billion KRW and suggested increasing its weighting from the fourth quarter of this year through next year.

On the 29th, Lee Ki-hoon, a researcher at Hana Securities, stated in a report, "The projected operating profit for 2026, assuming a complete lineup, is about 500 billion KRW, and the estimated corporate value is around 10 to 15 trillion KRW," adding, "We maintain it as our top pick."

He continued, "The two major headwinds in the industry are nearing their end, and the moment of growth through BTS's complete lineup and the introduction of the Weverse subscription model is gradually approaching. Although performance will be sluggish until the third quarter, considering the current stock price, which has fallen to a price-to-earnings ratio (P/E) of 21 times expected in 2025, it is necessary to consider increasing the weighting while looking forward to BTS's complete lineup next year," he elaborated.

Regarding the risk factor of decreased joint album purchases from China, which is pointed out as one of the risks in the entertainment agency industry, he expected it to ease. Researcher Lee Ki-hoon said, "The biggest risk in the entertainment agency industry is the decline in joint album purchases from China that began in the fourth quarter of last year. Given that it has decreased by an estimated 30 to 50% in terms of China's share compared to the peak, further decline is expected to be quite limited."

He added, "In the case of aespa, whose joint album purchases from China decreased by 40%, the recent album has slightly rebounded compared to the previous one, and the growth speed of rookie groups such as RISE, Boy Next Door, and TO1 is at a normal level compared to past rookie groups (close to 1 million albums per album within two years). Considering that the entertainment agency industry's operating profit consensus has decreased by 47% over the past year, even if there is an additional downward revision in performance, the slope will be quite gentle," he analyzed.

Although the ADORE issue is still ongoing, it is considered to have been sufficiently reflected in the stock price. He said, "Recently, HYBE terminated the shareholder agreement with CEO Min Hee-jin and others," adding, "From an investment perspective, the most important point is the concern over NewJeans' growth slowdown. Regardless of the investigation results, considering the recent stock price decline, this concern has been sufficiently reflected."

Regarding the gaming industry, he pointed out that at least guidance on investment costs should be provided to improve investors' accessibility. Researcher Lee Ki-hoon said, "Many investors are concerned about the gaming business, and the key issue is not profitability but the low correlation with existing businesses," adding, "However, if it is to be strongly pursued based on future growth potential, I hope at least guidance on investment costs (or management) will be provided to enhance investors' accessibility."

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