[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 5th that it is maintaining its “Buy” rating and target price of 109,000 won for SM ENTERTAINMENT CO., Ltd.(041510)(SM Entertainment).

Lee Hwa-jeong, an analyst at NH INVESTMENT & SECURITIES, stated, “Stable earnings momentum continues as the steady performance of legacy intellectual property (IP) is complemented by the rapid monetization of newer IP.” She added, “We particularly note the company’s differentiated hit ratio for IP. “With all fifth-generation IPs that debuted around 2024 successfully establishing themselves in the market, the company has once again demonstrated its structural capabilities in IP development and monetization,” she explained.
First, NCT WISH has stabilized its first-week sales at over 1.5 million copies per new album, and its tours are also expanding in scale per show, driven by a growing fanbase. Hearts2Hearts is currently in a phase where they are releasing digital singles frequently throughout the year, accumulating not only a track record of hit songs but also a growing fanbase. The researcher expects a new boy group to debut in early 2027 and believes that, given the company’s gradually improving capabilities in nurturing and stabilizing boy groups, the time required to generate revenue after their debut will be short.
He explained, “While the timing for the resumption of performances in China remains unclear, it is also positive that they are expected to be given the highest priority should they resume,” adding, “In July, an arena-scale fan meeting was held featuring a unit of NCT Dream’s Chinese members, and preparations are underway to launch a localized boy group in China through the establishment of STE, a joint venture with TME, in August.” He added, “We are paying close attention to these proactive steps toward business expansion in China.”
Consolidated revenue for the third quarter was 291.1 billion won (down 10% year-over-year), and operating profit was 35.5 billion won (down 26%), both slightly below consensus estimates. The analyst noted, “Margins were somewhat disappointing because the proportion of capital-intensive activities, such as fan meetings and festivals, was higher than expected,” but added, “It is positive that strong performance continued in high-margin ancillary revenue streams, such as merchandise and licensing.”