JYP Entertainment(035900) was down more than 7% in early trading on the 13th. Investor sentiment appeared to weaken on uncertainty over a contract renewal for its artist TWICE and weak second-quarter results.
As of 9:42 a.m. that day, JYP Entertainment was trading on the KOSDAQ market at 42,750 won, down 3,250 won (7.07%) from the previous session.
The previous day, JYP Entertainment said on a preliminary basis that its second-quarter operating profit on a consolidation basis came to 31 billion won, down 41.4% from the same period a year earlier.
In response, the securities industry lowered its target price for JYP Entertainment across the board.
Meritz Securities cut its target price to 65,000 won from 79,000 won. SK Securities also lowered it to 66,000 won from 75,000 won, and Heungkuk Metaltech Securities likewise cut it to 75,000 won from 80,000 won. NH Investment & Securities also reduced it to 69,000 won from 83,000 won, Samsung Securities to 62,000 won from 77,000 won, and Hana Securities likewise to 58,000 won from 79,000 won.
Park Jun-hyung of SK Securities said, "The military enlistment of Stray Kids and uncertainty over TWICE's contract renewal are burdens on mid- to long-term earnings," adding, "Not only the future renewal of TWICE but also low visibility on activity and comeback cycles calls for a conservative approach to future earnings estimates."
Song Ji-won of Heungkuk Metaltech Securities also said, "Reflecting uncertainty over TWICE's contract renewal, we made conservative adjustments to next year's album and tour assumptions," adding, "As the profit contribution from lower-vintage intellectual property (IP) is still limited, companywide operating profit and concert revenue are expected to contract this year."