“It depends on Blackpink”... Hana Securities, YG target lowered by 18%

Hana Securities lowered the target stock price for YG Entertainment (122870) (YG) by 18%. This is the background of the high dependence on the performance of the group Blackpink.

On the 4th, Hana Securities maintained its investment opinion at 'buy' and lowered the target stock price from 78,000 won to 64,000 won.

Lee Ki-hoon, a researcher at Hana Securities, said, "YG's sales in the fourth quarter of last year were KRW 109.4 billion, down 12% from the same period last year, and operating profit was KRW 400 million, down 98% over the same period, falling below market expectations." He added, "YG Plus, a subsidiary, performed worse than expected. “It is presumed that it is,” he said.

Researcher Lee said, “It is expected that Blackpink will repeat large-scale world tour-level tours and long hiatuses, so annual performance volatility will increase depending on Blackpink’s activities or not.” “There is a high possibility of repeated fluctuations,” he predicted.

He continued, "Recently, the largest shareholder purchased an additional 462,000 shares (about 20 billion won) at 42,000 to 44,000 won. This may be because the stock price has fallen a lot, but I have high confidence in the female idol group Baby Monster, which debuted last year. “It can be inferred,” he added.

He also predicted, “In a situation where the dependence on performance and stock price of Blackpink’s single IP (intellectual property rights) has increased, if these expectations are realized, both performance and valuation can be normalized.”

Reporter Junho Yoon, Ten Asia delo410@tenasia.co.kr