"You said BTS was coming"... K-content stocks rank last in New Year gains

[Financial News] Since the start of the New Year, gains in K-content stocks have been sluggish. Even with major positives such as the return of BTS this year, investor enthusiasm has yet to be reflected in share prices. However, securities analysts expect that concerts and other "post-comeback activities" will translate into better earnings, leading to a rise in K-content stocks over the course of the year.
According to the Korea Exchange (KRX) on the 7th, the KRX K-Content Index climbed 1.11% from January 2 to 6, the lowest gain among all 34 KRX indices. Over the same period, the Korea Composite Stock Price Index (KOSPI) rose 20.76%, while KOSDAQ gained 16.78%.
The KRX K-Content Index is composed of HYBE, JYP Entertainment (JYP), SM Entertainment (SM), and YG Entertainment (YG). These stocks have underperformed compared with the broader KOSPI and KOSDAQ rallies since the New Year. Specifically, over the same period, HYBE rose 7.73%, JYP fell 5.92%, SM dropped 21.93%, and YG edged up 1.01%.
Even so, inflows have remained steady. Since the beginning of the year, institutional investors have been net buyers of YG Entertainment shares worth 44.7 billion won and JYP shares worth 28.3 billion won. Foreign investors have purchased 301.2 billion won worth of HYBE shares. Retail investors have been net buyers of all four major entertainment companies.
Brokerages expect entertainment companies to deliver strong earnings this year. The year has also started on a solid note. Combined album sales of the four major entertainment companies last month are estimated at about 4 million units, up 37.6% from a year earlier. Their combined monthly listeners on Spotify reached 271 million last month, an increase of 29.5% year-on-year and 3.9% quarter-on-quarter.
With interest on the rise, the return of major artists is also expected to boost concert revenue. The four major entertainment companies are estimated to have drawn about 1.11 million concertgoers last month, up 55.3% from a year earlier. At HYBE, BTS is scheduled to return on the 20th of next month. SM Entertainment has been active since EXO made its comeback on the 19th of last month. At JYP Entertainment, TWICE’s Japanese unit MiSaMo released its first full-length Japanese album on the 4th. YG Entertainment plans to resume activities with BLACKPINK, which is set to release its third mini album on the 27th.
In particular, analysts see strong upside potential for HYBE’s share price on the back of BTS. Kim Yu-hyeok, an analyst at IBK Securities, noted, "Last month, the average return of the entertainment stocks under our coverage was 0.6%, underperforming the KOSPI by 23.4 percentage points. However, HYBE delivered the highest return at 13.8%, largely because the BTS world tour 'ARIRANG' announced on the 14th turned out to have a capacity of 4.5 million, far exceeding the market’s expectation of 3 million to 3.5 million."
He went on to say, "The total performance of the BTS world tour could exceed 2 trillion won in revenue and 400 billion won in operating profit. Since the BTS tour figures currently reflected in market consensus are lower than this, we expect upward revisions to first-half estimates and continued share price gains driven by earnings momentum. We maintain HYBE as our top pick in the sector."

yimsh0214@fnnews.com Im Sang-hyuk Reporter