[Weekend Money] BTS Set to Return... When Will Entertainment Stocks Rise?

Entertainment, Media, and Leisure Sectors
Poised for a Comeback Starting in March

Securities firms have projected a rebound in the entertainment, media, and leisure sectors in March, which have previously been neglected in the stock market, and have suggested that it is time to increase investment allocations in these areas.

BTS. Yonhap News.

Ji Inhae, a research analyst at Shinhan Securities, recently commented, "The entertainment, media, and leisure sectors have suffered the most from the relative lack of sector appeal and the liquidity black hole phenomenon centered on large-cap stocks." She continued, "However, now is the time for a turnaround, driven by a supply-demand gap, momentum gathering from March, earnings growth and improvement, a policy stance supporting KOSDAQ, and the benefits of productive financial policy." She added, "It is necessary to preemptively expand allocations."

In the entertainment sector, the activities of super intellectual properties (IPs) such as Blackpink and the comeback of BTS have been confirmed, along with the official return of legacy IPs such as EXO and Big Bang. For HYBE, high-margin IP revenues from BTS albums, digital releases, merchandise, and subsidiary rights will be reflected from the first quarter, and world tours and merchandise will be added from the second quarter onward.

Analyst Ji stated, "The combined performance of the five entertainment companies (HYBE, SM Entertainment, JYP Entertainment, YG Entertainment, and Dear U) is expected to reach a record high, with sales of 7.4 trillion won and profit of 1.1 trillion won, which is an upward revision from previous reports. There remains potential for further upward revision based on increased unit prices." She also noted, "Due to capital outflows, the average multiple has dropped to just 26 times."

The leisure sector is expected to enter its peak season in March. Inbound demand (foreigners visiting Korea) reached 18.94 million last year, and the government has set targets of 23 million for this year and 30 million for 2028–2029. During each period, tourism foreign currency earnings are expected to grow to 31.6 trillion won, 39.4 trillion won, and 55.9 trillion won, respectively.

The media sector is entering a turnaround phase after five years of downturn. Studio Dragon has continued to reduce production costs and increase the number of productions since the third quarter of last year, while CJ ENM offset a decline in TV advertising revenue with overseas rights and advertising sales from Tving.

The KOSDAQ activation policy, which will be fully implemented from March, will also benefit the entertainment, media, and leisure sectors, as they remain among the top market capitalization groups.

In addition, the content industry is expected to receive policy support focused on stabilizing industry structure and improving conditions for private capital inflows, thanks to productive financial policies. These policies include the National Growth Fund, funding from policy-based financial institutions, private sector financing, and system maintenance. The National Growth Fund has committed a total of 5.1 trillion won to the content sector over the next five years.

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