[Edaily Reporter Shin Ha-yeon ] On the 20th, EUGENE INVESTMENT & SECURITIES assessed that HYBE(352820)is expected to post strong third-quarter earnings thanks to the impact of BTS’s world tour, while the growth of new artists is also notable. However, the firm analyzed that uncertainty regarding BTS’s activities following their tour in the first half of next year is weighing on the stock price. While maintaining a “Buy” investment rating, the firm lowered its valuation and revised the target price downward by 14.7%, from 340,000 won to 290,000 won.

Lee Hyun-ji, an analyst at EUGENE INVESTMENT & SECURITIES, noted, “Although the company is posting solid earnings as the effects of BTS’s second- and third-quarter tours are reflected, the current stock price is trading at a 2027 forward price-to-earnings (P/E) ratio of 19.9x. Uncertainty regarding BTS’s activities in the second half of next year following their first-half tour is weighing on the stock price.”

EUGENE INVESTMENT & SECURITIES projected that HYBE’s third-quarter consolidated revenue would increase 100.5% year-over-year to 1.4583 trillion won, with operating profit turning to a surplus of 166.7 billion won. Both revenue and operating profit are in line with market consensus. The operating profit margin is expected to improve by 17.2 percentage points year-over-year to 11.4%.

In particular, the firm analyzed that BTS’s world tour—comprising a total of 24 stadium concerts in North America and Europe—drove growth in concert revenue. Third-quarter concert revenue is estimated at 701 billion won, an 8.2% increase from the previous quarter, while merchandise (MD) and licensing revenue is projected to rise 11.6% to 347 billion won.

The analyst stated, “While the BTS World Tour, comprising a total of 24 shows at stadiums in North America and Europe, drove overall growth in the concert segment, we expect concert revenue to grow quarter-over-quarter as world tours by various artists who released new albums in the previous quarter are added to the mix.” He added, “Driven by the expansion of tours and strong sales of BTS merchandise, both the concert and merchandise segments are expected to record their highest-ever revenue.”

The firm also projected that the album segment would continue to post solid results. This is attributed to strong sales of new releases by artists such as ENHYPEN and &TEAM, as well as steady sales of Cortis’s album, released last May. Third-quarter album revenue is expected to reach 256 billion won, a 34.7% increase year-over-year.

Amid the performance growth led by BTS, the rapid expansion of fanbases for newer artists was cited as a positive factor. Cortis, which released its mini-album last May in various formats—including lip balm, dice, and balls—is estimated to have sold approximately 1.8 million copies of the album alone in the third quarter.

The analyst explained, “Even assuming there are no new album comebacks in the fourth quarter, we project cumulative sales of over 5 million copies this year,” adding, “Looking at Cortis’s Weverse data, more than half of their followers are first-time Weverse subscribers, creating a virtuous cycle where a steady influx of new fans enables sustained sales of back catalog.”

The analyst also highlighted the growth trajectory of the global girl group KATSEYE. Since topping the Billboard 200 for the first time with their mini-album released in August of this year, KATSEYE has shown steep growth in streaming as well. They are currently on a world tour with approximately 600,000 attendees, primarily in North America and Europe, and analysis shows that the number of attendees per show has increased by about four times compared to their previous tour.

The analyst stated, “As the scale of the tour expands, sales of various types of merchandise will be added, and we expect the group to continue its rapid growth, particularly in Western markets.”

Significant improvement in annual performance is also expected. EUGENE INVESTMENT & SECURITIES estimated that HYBE’s consolidated revenue for this year will reach 4.746 trillion won, a 79.1% increase year-over-year, while operating profit will rise 433.5% to 263 billion won. For next year, the firm projected that revenue will decline by 14.7% to 4.048 trillion won, but operating profit will increase by 72.5% to 454 billion won.

However, the firm noted that for the stock price to rebound, BTS’s future activity plans need to be clarified. The analyst emphasized, “Since earnings expectations vary depending on BTS’s activities, for a short-term stock price rebound, BTS’s activities starting in the first half of next year need to become more concrete.”

He continued, “If growth continues at the current pace, we can look forward to KATSEYE and Cortis making their debuts at North American stadiums in the future,” adding, “With the debuts of U.S. girl groups and boy groups scheduled for next year, we also anticipate early success from localized artists who will carry on KATSEYE’s winning strategy.”