The views of the securities industry regarding JYP Entertainment (JYP Ent.) diverged. NH Investment & Securities and DAISHIN SECURITIES evaluated that a high growth cycle would begin through a large-scale world tour of its key artists, while Samsung Securities and Hana Securities expected the stock price to undergo a correction period due to a decline in the profitability of its subsidiaries and expansion of investments.
On the 18th, NH Investment & Securities raised its target stock price for JYP Entertainment from 90,000 won to 95,000 won and maintained a 'buy' investment opinion. Considering the previous day's closing price of 69,700 won, this indicates an upside potential of 36.3%.
Lee Hwa-jung, a research institute member at NH Investment & Securities, noted, "This year, the expansion of the tour scale of key artists, TWICE and Stray Kids, along with the entry of new artists (NEXZ, Kickflip) into the revenue-generating phase, is expected to drive performance growth."
DAISHIN SECURITIES also predicted that JYP Entertainment would enter a high growth cycle through large-scale performances this year. Lim Soo-jin, a research institute member at DAISHIN SECURITIES, explained, "Stray Kids plans to conduct a world tour for 2.2 million people, the largest in K-pop history." Accordingly, they set the target stock price higher from 75,000 won to 85,000 won.
However, Hana Securities and Samsung Securities expected that the stock price would undergo a correction for the time being due to underperformance in the fourth quarter of last year and the decline in the profitability of its subsidiaries. Thus, Hana Securities downgraded its target stock price from 94,000 won to 90,000 won, while Samsung Securities reduced its target from 92,000 won to 87,000 won.
JYP Entertainment reported a revenue of 199.1 billion won and an operating profit of 36.9 billion won for the fourth quarter of last year. While the revenue increased by 27% compared to the previous year, the operating profit decreased by 3%, which is considered disappointing when taking into account the revenue increase.
Lee Gi-hoon, a research institute member at Hana Securities, forecasted, "Due to the underperformance in the fourth quarter and the damage to the profitability of the subsidiary Blue Garage (formerly JYP360), which is hard to persuade investors about, the stock price will undergo some correction period." The annual revenue and operating profit of Blue Garage, which is responsible for merchandise planning (MD), were 90.7 billion won and 3.1 billion won respectively, indicating a considerably weak operating profit margin (OPM) of 3.4%.
Samsung Securities also noted that despite the growth of JYP Entertainment through platform integration and internalization, profitability improvements this year would be limited. Choi Min-ha, a research institute member at Samsung Securities, stated, "We plan to integrate the official online mall 'JYPshop' with FANS, operated by the subsidiary Blue Garage," adding, "Following the internalization of the platform in the fourth quarter and expansion of investments, an operating loss occurred, so profitability improvement is likely to be limited."