[Edaily Reporter Shin Ha-yeon ] On the 21st, SKSecurities stated that while JYP Entertainment Corporation(035900) ’s (JYP Entertainment) second-quarter earnings are expected to fall short of market expectations, growth momentum in its live performance and merchandise (MD) businesses is projected to strengthen in the second half of the year, driven by Stray Kids’ comeback and world tour. While maintaining its “Buy” investment rating, the firm lowered its target price by 18.5% from 92,000 won to 75,000 won to reflect weakened investor sentiment toward the entertainment sector.

Park Jun-hyung, an analyst at SKSecurities, stated, “Second-quarter revenue is projected to be 190.8 billion won and operating profit 38.2 billion won, both below market consensus,” adding, “We have revised our previous estimates downward as the recognition of excess revenue from TWICE’s North American tour and online merchandise sales from Stray Kids’ fan meetings has been deferred to the second half of the year.” He continued, “Although a total of five new albums were released, primarily by artists early in their careers, sales for each fell short of 500,000 copies. We believe the burden of fixed costs will increase due to these relatively low album sales.”

In the live performance segment, while TWICE’s world tour and 2PM’s Tokyo Dome concert were factored in, a decline was deemed inevitable due to the high base effect from Stray Kids’ North and South American tours in the same period last year. However, the company explained that the merchandise business continues to show solid performance through TWICE’s pop-up stores in major cities, and plans to expand this strategy to all future tours by its artists.

The resumption of Stray Kids’ activities in the second half of the year was cited as a key factor driving earnings improvement. Analyst Park said, “With Stray Kids’ comeback and world tour scheduled for the second half of the year, expectations are high for revenue growth and improved profitability,” adding, “While concert schedules for the Asian region through the first quarter of next year have been announced so far, additional schedules for regions such as North America and Europe are also expected to be revealed.”

He further emphasized, “As revenue from Stray Kids’ world tour merchandise and the previously postponed online fan meeting merchandise is set to be fully reflected, we believe the growth momentum of the concert and merchandise businesses will be further strengthened in the second half.”

Analyst Park added, “The current 12-month forward price-to-earnings ratio (PER) stands at 11x, which is at the historical low end of the band,” and noted, “Although we have lowered the target price to reflect a downward adjustment to the target multiple due to waning sector interest, we maintain our ‘Buy’ investment rating.”