Hana Securities analyzed that YG Entertainment recorded significant earnings surprises for three consecutive quarters as of the 20th, and that the upcoming world tour of BLACKPINK will be reflected in the second half of earnings, necessitating continued weight expansion.
The firm raised its target price from 120,000 won to 130,000 won and maintained its investment opinion of 'buy.' The closing price of YG Entertainment on the previous trading day was 93,200 won.
In the second quarter of this year, YG Entertainment's revenue recorded 100.4 billion won, an 11% increase compared to the previous year, and its operating profit turned positive at 8.3 billion won, significantly exceeding the securities industry's forecast of 3.4 billion won.
Lee Gi-hoon, a researcher at Hana Securities, noted, "Although there was no significant new announcement, music sales exceeded 4 billion won compared to the first quarter," adding, "This is influenced by the sharply rising proportion of BABYMONSTER." He emphasized, "The most crucial point is that the tour-related earnings of BLACKPINK have not yet been reflected, which could further raise expectations for the second half's performance."
The largest MD revenue in YG Entertainment's history was in 2023 during BLACKPINK's world tour, amounting to approximately 78 billion won. Hana Securities pointed out that the average MD revenue for YG Entertainment over the last three quarters is 22.7 billion won, which is significant as it was achieved without the BLACKPINK tour.
BLACKPINK will conduct 15 stadium tours in Korea, the United States, and Europe in the third quarter of this year, with the largest pop-up store opening in five cities in China, including Beijing and Shanghai, from this month for about four weeks.
The researcher stated, "The second half is expected to see the largest MD revenue in history, and with BLACKPINK, BABYMONSTER, and TREASURE each making their comeback once, it will approach the record high operating profit (36.5 billion won) previously recorded in 2023."
He added, "The projected operating profit for this year is about 67 billion won, which I see as a conservative forecast with very high surprise potential," and recommended continuous weight expansion.