Shocking Report Of How Low YG’s 2Q Profit Gain Attention, Operating Profit Around $220,000 ?
YG Entertainment, one of the “Big 4” K-pop companies, is currently experiencing a downturn in performance due to the absence of a strong intellectual property (IP) to fill the gap left by their flagship group, BLACKPINK. Analysts predict that a rebound in performance may only be possible in the latter half of the year.
On the 16th of July, Kim Hye-young, a researcher at Daol Investment & Securities, analyzed that “YG Entertainment’s consolidated sales in the second quarter of this year will record 101.7 billion won [$73,766,745], a 35.8% decrease compared to the same period last year, and the operating profit will decrease by 98.9% to 300 million won[$217,604].”
She added, “The main performances for YG Entertainment in the second quarter will be album sales from ‘BABYMONSTER’ and concert sales from ‘TREASURE.’ With only two idol IPs active this year, including the rookie group BABYMONSTER, the profit outlook is unfavorable. Expectations should be set for next year’s performance rather than this year’s.”
Consequently, Kim adjusted YG Entertainment’s target stock price downwards from 55,000 won to 46,000 won
Along with declining performance expectations, YG Entertainment’s stock price has also fallen sharply.
Previously, YG Entertainment and BLACKPINK renewed their contract for group activities, but not for individual activities, leading to uncertainty about BLACKPINK’s group activities, which has negatively impacted both stock prices and performance.
Kim noted, “The delay in IP generation has led to a performance freeze, making it essential for BABYMONSTER to succeed and for new IPs to emerge for sustainable growth. Actions that can dispel doubts about the production system are needed at this time.”
Kim Hyun-yong, a researcher at Hyundai Motor Securities, also commented on YG Entertainment, saying, “They are currently enduring a tough period. The key to next year’s performance recovery is the resumption of BLACKPINK’s full group activities, and in the long term, BABYMONSTER needs to follow BLACKPINK’s growth trajectory.”
Source: (A)
