Eugene Investment & Securities said on the 27th that whether Blackpink's encore tour and Big Bang's activities are made official will affect upward revisions to earnings estimates for YG Entertainment (YG Entertainment). It lowered the target price to 90,000 won from 110,000 won while maintaining a buy rating. The previous trading day's closing price of YG Entertainment was 71,300 won.
In the fourth quarter of last year, YG Entertainment's revenue rose 65.1% on-year to 171.8 billion won, and operating profit jumped 2,145.1% to 22.3 billion won, in line with market expectations.
Lee Hyun-ji, an analyst at Eugene Investment & Securities, said, "All affiliated artists focused mainly on performances," and added, "In particular, Blackpink saw concert revenue increase as per-show guarantees in the Southeast Asian market rose significantly from the previous tour, driving top-line growth." Blackpink's MD revenue recognized in the fourth quarter of last year is estimated at about 28 billion won.
BABYMONSTER is expected to have recorded about 3 billion won in MD revenue this quarter. The analyst explained, "Encouragingly, with a single physical album release last year, along with the first world tour and Asia fan-con tour, the group recorded nearly 40 billion won in annual MD revenue."
The analyst added, "This is a remarkable achievement for a rookie artist entering the third year since debut, and after the second-quarter release of a new album this year, the group is expected to once again prove strengthened profit-generating capacity through a world tour in the second half."
Lee added, "We lowered our earnings estimates and cut the target price to 90,000 won," and said, "Although there has been no official announcement, if an encore tour is added after Blackpink's new album release and Big Bang's activities are officially announced, we will raise our earnings estimates."