BLACKPINK lays the groundwork, rookies lift shares... What is YG’s winning bet?

[Financial News] Rookies are expected to take center stage in the next leg of YG Entertainment’s (YG) stock story. With established artists underpinning earnings, Babymonster’s growth and the commercial success of new groups set to debut next year are seen as factors that could boost the company’s value.
Daol Investment & Securities analyst Im Do-young focused on the announcement of Babymonster’s tour schedule in Western markets and the early performance of a new group expected to debut in 2027, on the 13th. Im maintained a Buy rating and a 60,000-won price target.
Near-term results are expected to be broadly in line with market expectations. Im estimated third-quarter revenue this year at 151.7 billion won and operating profit at 20 billion won. Revenue is expected to fall 12.3% and operating profit 35.8% year on year, but rise 18.8% and 82.3%, respectively, from the previous quarter.
The analysis said it is difficult to judge concert performance based solely on audience numbers. Im estimated third-quarter concert attendance at 260,000 for TREASURE, 210,000 for Babymonster and 350,000 for BIGBANG, for a total of 820,000. That is comparable to the same period last year, when BLACKPINK’s world tour began.
However, revenue will vary depending on the concert venues and how it is recognized. Im forecast, “For Babymonster and TREASURE, Japanese concerts—which are recognized as royalty revenue—make up a high 80–90% of performances, so concert revenue will fall year on year while royalty revenue will grow.” He expected this trend to continue in the fourth quarter, as 10 of the 24 shows on BIGBANG’s tour will be in Japan.
YG’s new boy group is expected to debut in the first quarter of next year, and its girl group in the fourth quarter. Considering their early post-debut activities, their contribution to 2027 earnings may be limited, but the company’s value could respond earlier if they achieve commercial success.
Im said, “If the expanded lineup of new intellectual properties (IPs) proves successful, it could have a positive, early impact on valuation,” adding, “If the rookies follow a similar early trajectory to Babymonster after debut, and that success leads to concerts being launched and scaled up, there will be grounds to raise earnings estimates for 2028 and beyond.”

[email protected] Choi Do-seon Reporter