BTS Comeback Fails to Boost HYBE Stock Price

Following BTS's comeback, securities firms have lowered their target stock prices for HYBE as its stock price has fallen. Since BTS's return on the 20th of last month, HYBE's stock price has plummeted by nearly 24%. Shinhan Investment & Securities lowered its target price for HYBE from 450,000 won to 400,000 won, while maintaining its 'buy' investment opinion. The report analyzed, "Ironically, HYBE's market capitalization has decreased by 24% since BTS's comeback," adding, "We need to focus on performance after the evaporation of super intellectual property (IP)."

Shinhan Investment & Securities forecasts first-quarter revenue of 656.3 billion won and operating profit of 49.9 billion won. While revenue is expected to exceed consensus, operating profit is projected to fall short of performance forecasts. Ji In-hae, a researcher at Shinhan Investment & Securities, stated, "Revenue, which signifies fandom consumption, is expected to show consecutive strong performance, but profits will be somewhat lukewarm, meeting or slightly falling short of expectations through the first quarter." She further analyzed, "Due to increased costs from expanding BTS's proportion and new album production expenses, there could be a significant impact on cost of goods sold compared to sales and administrative expenses on the cost side."

Although the stock price has temporarily declined, BTS's return is expected to boost HYBE's mid- to long-term performance. The BTS world tour 'Arirang' will consist of 82 performances in 34 cities across 23 countries, with an estimated audience of 60,000 per show. Based on an average ticket price of 250,000 won, ticket sales alone are estimated at 1.23 trillion won, and with merchandise sales of 615 billion won, total concert revenue is projected to reach 1.845 trillion won.

Amidst the worsening investment sentiment across the entertainment industry, securities firms are successively lowering target stock prices for entertainment companies. NH Investment & Securities reduced SM Entertainment's target stock price by 23% to 123,000 won, and YG Entertainment's target stock price by 14% to 77,000 won. NH Investment & Securities also adjusted HYBE's target stock price down by 4% from the previous level to 430,000 won.

A similar phenomenon occurred ahead of the release of Pearl Abyss's highly anticipated game, 'Crimson Desert'. On March 19th, the day before its release, Pearl Abyss's stock price hit its lower limit, and on the release day, it fell an additional 10%. Although the game was a success, the stock experienced a 40% evaporation in a short period. The phenomenon of stock prices plummeting despite successful performances or hit games can be explained by 'material exhaustion'.