[Edaily Reporter Kwon Oh Seok ] HEUNGKUK METALTECH CO.,LTD. announced on the 23rd that it is maintaining its “Buy” rating on YG Entertainment Inc.(122870)(YG) but lowering its target price from 80,000 won to 58,000 won.

Song Ji-won, an analyst at HEUNGKUK METALTECH CO.,LTD., stated, “The third quarter is expected to see stronger momentum compared to the first half, driven by Big Bang’s 20th-anniversary world tour and new album release, as well as Baby Monster’s world tour and TREASURE’s fan concert.” Big Bang’s 20th-anniversary world tour ‘XX: COSMOS,’ unveiled on June 11, consists of 33 shows with an average attendance of over 40,000 per show. Based on the currently announced schedule, we expect a maximum capacity of approximately 1.74 million and actual attendance of about 1.3 million,” she analyzed.
He added, “Considering that the majority of shows for both BIGBANG and BABYMONSTER’s world tours are concentrated in the third and fourth quarters, we expect the merchandise segment to grow by more than 140% in the second half compared to the first half, in tandem with concert revenue.” He further noted, “The rookie boy group scheduled to debut in the fourth quarter is expected to strengthen YG’s mid- to long-term growth foundation, for which diversification of activity IP is urgently needed.”
However, he projected that second-quarter revenue would come in at 106.9 billion won (up 6.4% year-over-year) and operating profit at 8.8 billion won (up 5.5%), both falling short of market expectations (9.6 billion won). Analyst Song explained, “Album sales will reflect approximately 810,000 copies of BABYMONSTER’s third mini-album ‘CHOOM (Dance)’ and approximately 1.03 million copies of TREASURE’s fourth mini-album ‘NEW WAV,’ but are expected to decline quarter-over-quarter due to the high base set by BLACKPINK’s third mini-album ‘DEADLINE’ (approximately 2 million copies sold) in the first quarter.”
He added, “Concert revenue is expected to include seven Southeast Asian shows from TREASURE’s ‘PULSE ON’ world tour, three domestic fan concerts for ‘NEW WAV,’ and three domestic shows from BABYMONSTER’s ‘CHOOM’ world tour; however, revenue is projected to decline both quarter-over-quarter and year-over-year due to the conclusion of BLACKPINK’s tour and a reduction in the number of shows compared to the same period last year.” The company also projected full-year revenue of 600 billion won (+10.0%) and operating profit of 74.8 billion won (+4.8%) for this year.