DAISHIN SECURITIES analyzed on the 2nd that YG Entertainment is expected to experience changes in BLACKPINK's comeback and merchandise (MD) strategy from the second half of this year, and the momentum for new artists is anticipated to expand. It raised the target stock price from the previous 90,000 won to 110,000 won, an increase of 20%, while maintaining an investment opinion of 'buy'. On the previous trading day, YG Entertainment's closing price was 81,000 won.
DAISHIN SECURITIES expects YG Entertainment's consolidated revenue for the second quarter of this year to reach 10.17 billion won, up 14.7% compared to the same period last year, and operating profit to record a turnaround at 4.6 billion won. This reflects the sellout of BABYMONSTER's second concert merchandise and the impact of pop-up stores in China.
Researcher Lim Soo-jin of DAISHIN SECURITIES said, 'The second quarter is expected to see a slowdown in performance compared to the previous quarter due to the gap in album releases, but apart from the deferral of approximately 1.3 billion won in costs from the first quarter, there are no significant factors for fluctuation, so performance stability will be maintained.'
Researcher Lim anticipates that with the full-scale activities of major artists such as BLACKPINK, BABYMONSTER, and TREASURE in the second half of the year, YG Entertainment will enter a period of performance rebound. BLACKPINK has already exceeded the market expectation of 1.8 million attendees based on the maximum expected number for the concert schedule announced in the second half of the year. DAISHIN SECURITIES estimated that the cumulative number of attendees is expected to exceed 2.5 million when the additional schedule for the first quarter of next year and encore performances are announced.
Researcher Lim said, 'BLACKPINK's new album is expected to be released during the concert schedule, and the performance estimate has been increased reflecting projected sales of 2 million copies.'
DAISHIN SECURITIES identified the MD business as a key sector that will lead to YG Entertainment's performance improvement in the future. YG Entertainment is implementing an aggressive strategy by transitioning from a conservative MD strategy up to last year to operating pop-up stores by city, diversifying product categories, and expanding products for light fans. In particular, the effectiveness of the MD strategy is expected to peak during the full group activities of BLACKPINK.
Additionally, with the debut of a new boy group next year and a new girl group scheduled for 2027, it is expected that the discount factor due to dependency on specific artists will gradually diminish. DAISHIN SECURITIES named YG Entertainment as the top stock pick in the industry.
Researcher Lim noted, 'We have confirmed the performance improvement effect due to BLACKPINK's comeback and the expectations for new artists, and the scale of the world tour so far announced already exceeds market expectations,' adding, 'Future announcements of additional schedules such as encore performances will likely lead to a rise in stock prices.'