[Edaily Reporter Kwon Oh Seok ] Since the start of this year, investor sentiment across the entertainment sector has significantly weakened, leading to a sharp decline in the market capitalization of major listed companies.

According to MP Doctor on the 19th, as of the 16th, the combined market capitalization of the four companies— JYP Entertainment Corporation(035900)(JYP), YG Entertainment Inc.(122870)(YG), SM ENTERTAINMENT CO., Ltd.(041510)(SM), and HYBE—totaled 12.978 trillion won. This represents a decrease of over 8 trillion won compared to the 21.016 trillion won recorded at the end of last year.
Looking at individual companies, SM ENTERTAINMENT CO., Ltd. saw the largest decline. Its market capitalization fell by 48.8%, from 3.091 trillion won at the end of last year to 1.582 trillion won this month. This was followed by YG Entertainment Inc. (-42.1%), HYBE (-36.0%), and JYP Entertainment (-35.7%) in order of the highest decline rates.
Stock price performance was also lackluster. Since the start of this year, the average stock price decline for these four companies has been 40.9%, standing in stark contrast to the KOSPI’s rise of 61.9% over the same period. The decline was also significantly larger than the KOSDAQ’s drop of 14.4%.
At the beginning of the year, buying momentum was driven by anticipation ahead of BTS’s comeback concert in Gwanghwamun; however, after the concert ended, the perception that the event’s impact had faded led to an increase in profit-taking. Additionally, uncertainty surrounding the next-generation major IPs set to lead the industry after BTS, coupled with the shift of funds toward large-cap stocks such as semiconductors amid the AI investment boom, also weighed on the market.
Earnings forecasts are also being revised downward somewhat. According to financial information provider FnGuide Inc., the combined operating profit for the second quarter of this year for four companies—for which at least three securities firms have provided estimates—totaled 257.9 billion won. This figure is 17 billion won lower than the forecast made three months ago (274.9 billion won).
Target prices are also trending downward. Based on the same criteria, the average target price for the four companies fell by 7.4% compared to the previous figure. In particular, YG Entertainment Inc. saw the largest adjustment, dropping 13.11% from 85,889 won to 74,632 won. This was followed by SM ENTERTAINMENT CO., Ltd. (-9.10%), HYBE (-5.73%), and JYP Entertainment (-1.65%).
However, some in the securities industry note that the recent decline in stock prices has eased valuation pressures, making the sector as a whole more attractive from a valuation perspective. HYBE, in particular, is being highlighted as the top pick within the sector, as BTS’s activities as a full group are expected to continue through next year.