"EXO and NCT Album Sales Rise, but SM Target Price Lowered"[Click e-Stock]

On April 15, iM Securities revised its target price for SM Entertainment from 160,000 won to 140,000 won to reflect a decline in sector valuation. The investment opinion was maintained as 'Buy'.

Ji-won Hwang, a researcher at iM Securities, stated in a report that, "This year, geographic diversification and rapid monetization of newer artists will be key, and the company is expected to focus on defending profitability through cost control rather than expanding its scale."

For the first quarter of this year, revenue is expected to reach 244.5 billion won, up 6% year-on-year, and operating profit is projected to be 36 billion won, up 11% year-on-year, both in line with consensus. In its core business, despite the off-season for artist activities, album sales (1.85 million copies) increased year-on-year due to the release of new albums by EXO, NCT JNJM, and Irene. In terms of performances, it is estimated that the company attracted over 1 million attendees, with increases in audience size per show for concerts such as 14 by NCT WISH, 12 by Super Junior, 11 by NCT DREAM, 11 by RIIZE, 4 by aespa, and 3 by SM TOWN. Online pre-orders for NCT WISH popup merchandise will be reflected in the second quarter. Among consolidated subsidiaries, DearU is expected to have made a significant profit contribution, benefiting from increased royalty income due to a rise in QQ Music Bubble subscriptions and favorable exchange rates.

Researcher Hwang added, "If meaningful results become visible in key markets such as China and the United States, a valuation rerating could be possible."

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