YG smiled at the 'low-experience IP jackpot'… Baby Monster and Treasure's double pull
Yang Hyun-seok's return as a master has yielded results
YG Entertainment (hereafter YG) recorded an 'earnings surprise' in the first quarter, successfully bouncing back in its performance. The analysis indicates that the activities of low-experience artists like Baby Monster and Treasure, as well as the expansion of global tours and merchandise operations, were effective. The effects of organizational improvement have become clear since the return of Yang Hyun-seok, who focused on the essence of music.
On the 9th, YG Entertainment announced that it recorded an operating profit of 9.525 billion won for the first quarter of this year on a consolidation basis, marking a return to profitability compared to the same period last year. Sales during the same period increased by 14.7%, reaching 100.2 billion won. This performance surpassed market expectations.
Earlier in February, MERITZ Securities raised its target stock price for YG, noting that the revenue from low-experience artists was being reflected more quickly than expected. Notably, significant results have emerged as the monetization phase of low-experience and new intellectual property (IP) has begun earlier than anticipated.
The securities market is also positive. Shinhan Investment Corporation raised YG's target stock price to 82,000 won, calling it "the currently most undervalued entertainment company." Researcher Ji In-hae projected that "the momentum from Baby Monster will be reflected in the second quarter, and profit leverage will be fully realized starting from the third quarter with BLACKPINK's world tour."
Regarding this return to profitability, the company stated, "The low-experience IPs of Treasure and Baby Monster, which were strategically invested in, have driven the growth in scale," adding that "global tours and associated performances and merchandise operations also contributed to stabilizing the revenue structure."
In particular, Treasure and Baby Monster have stood out in album sales and overseas tours. Treasure surpassed 1 million cumulative attendees with its solo tour in Japan, while Baby Monster began its global tour just a year after its debut, establishing itself as a representative girl group of the fifth generation. Most importantly, they are achieving significant stair-step growth as a skilled group in the global K-pop scene.
In the second half of the year, a major tour with BLACKPINK, considered the 'maximum IP,' along with new album releases and additional tours from Treasure and Baby Monster is expected. Furthermore, as expectations for the lifting of the Korea-China ban rise, YG plans to swiftly respond to changes in the Chinese market to pursue sustained growth.
Behind the success of Treasure and Baby Monster lies the strong support of YG and Yang Hyun-seok. Yang Hyun-seok started as a first-generation K-pop idol and has become a planner who drives the global popular music industry. As the chief producer of YG Entertainment, Yang Hyun-seok still exerts a strong influence in the K-pop market.
In the 1990s, he discovered Jinusean and 1TYM, bringing hip-hop-based music to the mainstream. He then revealed his true abilities as a planner with the full-fledged opening of the idol era. From BIGBANG, 2NE1, WINNER, iKON, BLACKPINK, Treasure, to Baby Monster, the groups he has personally debuted have always generated new trends.
The reason Yang Hyun-seok is gaining attention goes beyond just discovering stars. His core competitiveness lies in his producing ability to design the overall artist experience, including music, performance, styling, and team identity. Particularly, his production approach, which emphasizes fundamental skills and individuality rather than being swayed by trends, has firmly established YG's distinct color.
Since returning as a producer in 2023, he has once again produced results in his own way. In an era when the overall flow of the music industry is changing rapidly, Yang Hyun-seok's approach, which reads trends without losing sight of the essence, is presenting a new coordinate for K-pop.
[Photo] YG Entertainment
[OSEN]