[Edaily Reporter Kwon Oh Seok ] SKSecurities announced on the 20th that it is maintaining its “Buy” rating on YG Entertainment Inc.(122870)(YG) but lowering its target price from 82,000 won to 63,000 won.

Park Jun-hyung, an analyst at SKSecurities, said, “Big Bang’s activities are scheduled to begin in earnest in August during the second half of the year. The schedule announced so far includes 33 dome and stadium concerts expected to draw approximately 1.8 million people; factoring in additional shows, the scale is expected to rival BLACKPINK’s ‘DEADLINE’ tour,” he said. “BABYMONSTER’s second world tour and TREASURE’s fan concerts also began in late Q2 and are expected to contribute significantly to concert revenue in the second half of the year.”
The analyst continued, “With the debut of a new boy group scheduled for September, we believe the artist portfolio will be further strengthened,” adding, “We are lowering the target price to reflect the downward revision of earnings estimates due to the lull in artist activities during the second quarter. However, he elaborated, “Since BIGBANG’s 20th-anniversary activities are scheduled to continue through the first quarter of next year, earnings momentum centered on legacy IP (intellectual property) is expected to remain strong in the short term.”
He further emphasized, “We believe the direction of medium- to long-term earnings and stock prices will be determined by whether existing, relatively new IP continues to grow and by the commercial success of new artists.”
The firm projected that second-quarter revenue would come in at 109.18 billion won (+8.7% year-over-year) and operating profit at 9.00 billion won (+7.6%), both falling short of market expectations. Analyst Park noted, “Amid a decline in artist activities compared to the previous quarter, the high base effect resulting from BLACKPINK’s new album release and large-scale tour in the first quarter is the primary factor behind the slowdown in earnings.”
He explained, “Album sales are expected to total 1.65 million copies, reflecting Baby Monster’s third mini-album ‘CHOOM’ and TREASURE’s fourth mini-album ‘NEW WAV,’” adding, “A quarter-over-quarter decline in album revenue is inevitable due to the cost burden associated with comeback production expenses.”
He further noted, “Concert revenue is expected to include seven shows from TREASURE’s Asian tour, three fan concerts, and three shows from BABYMONSTER’s second world tour,” adding, “Related revenue is also projected to slow due to a decrease in concert activities compared to the previous quarter.”