[Edaily Reporter Hyera Lee ] On the 23rd, SKSecurities stated that while it expects SM ENTERTAINMENT CO., Ltd.(041510)’s second-quarter operating profit to slightly exceed market expectations, it lowered its target price from 134,000 won to 120,000 won to reflect costs related to investments in North America and the debut of new artists.
Park Jun-hyung, an analyst at SKSecurities, stated in a report released that day, “While earnings momentum in the second half will be limited compared to the first half, it is important to keep an eye on next year, when the results of this year’s investments will begin to materialize in earnest.”

SKSecurities projected SM ENTERTAINMENT CO., Ltd.’s second-quarter revenue at 332.7 billion won and operating profit at 53.3 billion won, representing a 3.5% year-over-year decrease in revenue and an 11.9% increase in operating profit, respectively. These figures are slightly above market estimates.
By segment, the firm expects album sales to reach 5.73 million units, a decrease of approximately 2% year-over-year. Analyst Park noted, “Album sales are expected to decline slightly year-over-year,” but added, “However, sales of new albums by major artists are continuing to show steady growth, and in particular, the growth of newer IPs (intellectual property) is continuing.”
In the concert segment, revenue growth is expected due to large-scale concerts by major artists such as aespa, EXO, DongbangTransport&Logistics, Super Junior, and SHINee, as well as an increase in audience attendance. He predicted, “Given the high proportion of concerts featuring older IPs in the concert segment, the improvement in profitability will be limited.”
On the other hand, he identified the merchandise (MD) business as the biggest growth driver. Analyst Park analyzed, “The business is expected to continue its steady growth, driven by an increase in pop-up stores following artist comebacks, combined with the recognition of online merchandise sales from the NCT WISH Bakery pop-up store held in the first quarter.”
He emphasized that attention should be focused on investment returns rather than earnings in the second half of the year. “We have revised our full-year earnings estimates downward to reflect investment costs aimed at expanding aespa’s presence in the North American market, as well as debut-related expenses for SMTR25, which is expected to debut in the fourth quarter,” he explained, adding, “However, SMTR25 has already secured a core fanbase through various content such as variety shows and fan meetings even before their official debut, so we anticipate strong performance following their official debut.”
He went on to stress, “Rather than focusing on a short-term slowdown in earnings, we need to look ahead to 2027, when the returns on the investments made in the second half of this year will begin to materialize in earnest.”