YG Entertainment Sees Sharp Rise in Target Price Thanks to BABYMONSTER’s Rapid Growth
[이데일리=원다연 기자] Korea Investment & Securities announced on the 12th that it would maintain a “Buy” investment opinion on YG Entertainment (122870), citing the rapid growth of BABYMONSTER, and raised its target price from 71,000 won to 85,000 won. The previous day’s closing price was 74,400 won.
YG Entertainment’s Q1 revenue reached 100.2 billion won, up 15% year-on-year, with an operating profit of 9.5 billion won, marking a return to profitability and significantly beating market expectations.
Researcher Ahn Do-young of Korea Investment & Securities explained, “There were three main surprise factors: strong merchandise (MD) sales from the BABYMONSTER tour and TREASURE’s new album release, 4.2 billion won in investment gains from YG Investment, and a trickle-down effect from increased artist activities, which normalized profits at YG PLUS.”
He added, “YG Entertainment is pursuing a strategy to diversify its MD and IP-related business portfolio so that not only core fans but also casual fans can participate in consumption. In Q4 and Q1, MD revenue reached 23 billion won and 26 billion won respectively, driven by BABYMONSTER and TREASURE. For comparison, the average quarterly MD revenue during BLACKPINK’s tour was 18.8 billion won.”
“Even considering that about 5 billion won of TREASURE’s album sales in Q1 were recognized as MD revenue, it is a level comparable to that during BLACKPINK’s world tour,” he stated.
“This result reflects not only the impact of BABYMONSTER’s growth but also the company’s efforts in MD diversification,” he emphasized. “It suggests that the upcoming BLACKPINK tour in the second half of the year could achieve even higher MD sales than the previous one.”
Researcher Ahn also noted, “In the second half of the year, major IPs like BLACKPINK, BABYMONSTER, and TREASURE will be actively promoting, which is expected to significantly boost operating profit. There is still potential for upward revisions to projections driven by BABYMONSTER.”
He added, “With the recent easing of China’s ‘Korean Wave’ restrictions, the company is also strengthening its business foundation in China by restructuring its local corporate governance and increasing BABYMONSTER’s exposure in the Chinese market. This is another positive development.”
2025. 5. 13.
