LS Securities said on the 9th that low-tenure intellectual property (IP) and a platform business centered on Weverse are contributing to the growth of HYBE(352820), noting it is worth attention. It maintained an investment opinion of "Buy" and a target price of 300,000 won. HYBE's previous trading day closing price was 181,400 won.
Researcher Park Seong-ho of LS Securities said, "Market interest in HYBE is focused on the activities of BTS, but it is also necessary to pay attention to the rapid growth of low-tenure IP and the platform business centered on Weverse," adding, "HYBE holds multiple artist IPs along with a global fan platform, so we judge that the potential is high to expand its business scope into content, characters, and artificial intelligence (AI) going forward."
The rookie artist Cortes recorded 3.3 million in sales for the previous album. Starting on Jul. 7, the act has been on a 14-date tour in North America and Japan, showing the fastest rise in recognition among low-tenure IP.
Park also explained that KATSEYE is set for a North America-Europe tour more than twice the size of the previous tour, and with the debut of the rookie group Tweed in the second half of this year, the IP portfolio and mid-to-long-term revenue base are expected to expand further.
Monthly active users (MAU) of the fan service platform Weverse in the second quarter were 14.4 million, up about 3.5 million from a year earlier.
Park said, "The performance of low-tenure IP activities and the comeback effect of BTS led to user inflows, and paid membership metrics are rising quickly, so Weverse's strong profit contribution is expected this year," adding, "As platform revenue stabilizes, business diversification leveraging IP is anticipated going forward."
LS Securities projected HYBE's consolidated sales for this year at 5.0477 trillion won, up 90.5% from a year earlier, and operating profit at 308.9 billion won, up 526.4%.
Park said, "Through second-quarter results, we confirmed the high sales contribution of BTS concerts and, reflecting this, raised our outlook for the second half," adding, "Despite the burden of production costs from increased activity by artists in the second half and rookie debuts, solid profit generation is likely based on the leverage effect from large-scale concert sales, along with the higher settlement rate following BTS's contract renewal."