"Down 11%"... From 140,000 Won to 40,000 Won, Park Jin-young's Company Once Said to Be a 'Must-Buy' Even Has Its Target Price Cut [Shareholders' Club]

[Financial News] Shares of JYP Entertainment, one of South Korea's four major entertainment companies, plunged on the 13th. The drop came as weak second-quarter earnings were compounded by uncertainty over contract renewals for TWICE members.

JYP Entertainment closed at 40,850 won on the KOSDAQ, down 11.20% from the previous session. The stock, which was in the 70,000-won range at the start of the year, marked its lowest closing level of the year.
While money has been flowing into Samsung Electronics and SK hynix, leaving the broader entertainment sector under pressure, JYP Entertainment was hit by an earnings shock in the second quarter and a series of failed contract renewals involving TWICE members.
Earlier, Jeongyeon said she would not renew her contract, and Chaeyoung also expressed her intention to leave JYP on the same day. Both, however, added that they would continue TWICE activities without change.
JYP Entertainment disclosed the previous day that its consolidated operating profit for the second quarter fell 41.4% from a year earlier to 31 billion won. That was 18% below market expectations. Revenue came to 183.1 billion won, while net profit fell 15.1% and 40.3% year on year to 21.7 billion won.
Stray Kids, the company's cash cow, is also approaching the point when its members will have to enlist in the military.

In light of these factors, securities firms have been lowering their outlook for JYP Entertainment one after another. In a report, SK Securities cut its target price for JYP Entertainment from 75,000 won to 66,000 won.
Park Jun-hyung, an analyst at SK Securities, said, "Stray Kids' military enlistment and uncertainty over TWICE's contract renewals are factors that will weigh on medium- to long-term earnings." He added that, in TWICE's case, future activity and comeback cycles could become less frequent.
Meritz Securities lowered its target price from 79,000 won to 65,000 won, NH Investment & Securities cut it from 83,000 won to 69,000 won, and Hana Securities set it at 58,000 won.
As JYP Entertainment's stock price tumbled, attention has returned to the fact that Park Jin-young PD recommended buying the stock on a YouTube channel three years ago.
In November 2023, Park Jin-young PD appeared on the YouTube channel Syuka World and stressed, "If I had spare cash, I would definitely buy our company's stock," adding, "This is the time."
At the time, JYP Entertainment's stock was in the 90,000-won range. It was a period when TWICE was gaining real traction in the North American market and Stray Kids had reached No. 1 on the Billboard 200.
Park Jin-young said, "JYP's stock may fall over the next year, but I believe in where it will be three or five years from now," expressing confidence in a long-term upward trend. He currently holds a 15.37% stake in JYP Entertainment.
The broader entertainment sector later went through a correction and fell into the 40,000-won range in the second half of 2024, but it recovered to the 80,000-won range the following year. However, as the sector was left behind in the semiconductor rally, it again dropped into the 40,000-won range. On top of that, an earnings shock and a bleak outlook for future performance added to the negative momentum.


[email protected] Ahn Ga-eul Reporter