SK Securities on the 18th said YG Entertainment faces a year of portfolio expansion, with the returns of Big Bang and Blackpink, a new release and second world tour by BABYMONSTER, and the debut of new intellectual property (IP).
At the same time, it initiated coverage with a "Buy" rating and a target price of 100,000 won. The previous trading day's closing price for YG Entertainment was 62,300 won.
Park Jun-hyung, an analyst at SK Securities, said, "YG Entertainment is a company with experience producing major legacy IP such as Blackpink and Big Bang," and noted, "The next-generation IP, BABYMONSTER, is also gaining traction quickly." In fact, even in its second year since debut, BABYMONSTER handled album sales of 700,000–800,000 and a world tour drawing about 400,000 people.
Park projected that this year, Blackpink's new release, BABYMONSTER's comeback, and Big Bang's comeback will lift earnings.
Regarding Blackpink, Park said, "The new release dropped on Feb. 27 recorded first-week sales of 1.7 million, surpassing the previous album's 1.5 million," adding, "After the 'DEADLINE' world tour ends, the possibility of encore shows remains, so additional upside to results is expected." Previously, after the "Born Pink" promotion, Blackpink drew about 400,000 people to encore shows.
On Big Bang's comeback, Park added, "As the group marks its 20th anniversary, the comeback has been made official, and expectations are rising," and "Although our estimates do not reflect Big Bang's activities, even G-Dragon alone could handle a tour drawing about 1 million people, implying considerable upside to results."
On BABYMONSTER, Park said, "With a May comeback and a second world tour in June, the group plans to expand its activity footprint to Latin America, Europe, and Oceania," and projected, "Compared with the first tour (32 shows, 470,000 attendees), the second tour will grow to 44 shows and 880,000 attendees."
SK Securities forecast YG Entertainment's revenue this year at 688.6 billion won and operating profit at 95.2 billion won. That represents increases of 26.3% and 33.5%, respectively, from a year earlier.