HYBE forecast to return to profit in Q3 on BTS tour; target price: 290,000 won

[Financial News] Eugene Investment & Securities forecast that HYBE would post earnings in line with market expectations in the third and fourth quarters, driven by BTS’s world tour and growth among newer artists. It maintained its “Buy” rating and lowered its target price by 14.7%, from 340,000 won to 290,000 won.
In a report on the 20th, Lee Hyun-ji, an analyst at Eugene Investment & Securities, forecast HYBE’s third- and fourth-quarter revenue at 1.4583 trillion won, up 100.5% from a year earlier. Operating profit was estimated at 166.7 billion won, marking a return to profitability and roughly in line with the market forecast of 166 billion won.
The album division was expected to deliver solid results, with strong sales of new releases by ENHYPEN and &TEAM complemented by steady sales of CORTIS’s album released last May.
The concert division was expected to drive growth as BTS held a total of 24 world-tour shows at stadiums in North America and Europe. With other artists’ world tours and sales of BTS-related merchandise also increasing, concert and merchandise-and-licensing revenue was forecast to reach all-time highs.
The analyst said, “Amid strong results driven by BTS, it is also worth paying attention to the growth of newer artists.”
CORTIS was estimated to have sold about 1.8 million copies of its existing albums alone in the third and fourth quarters. Its cumulative album sales this year were forecast to exceed 5 million copies. The analyst explained that, with more than half of Weverse subscribers being new users, the influx of fans and sales of existing albums were forming a virtuous cycle.
After topping the Billboard 200 for the first time with its mini-album released last August, KATSEYE has also seen rapid growth in streaming metrics. It is currently on a world tour centered on North America and Europe, with an estimated audience of around 600,000, and attendance per show has increased about fourfold from the previous tour.
The target-price cut reflects a reduction in the applied price-to-earnings ratio. The current share price stands at about 19.9 times projected earnings for next year. The analyst said uncertainty over BTS’s activities following its tour in the first half of next year was weighing on the share price.
The analyst said, “For a short-term rebound in the share price, BTS’s activities after the first half of next year need to become clearer,” adding, “If the current growth continues, KATSEYE and CORTIS could also be expected to make it into stadiums in North America.”

[email protected] Lee Jeong-hwa Reporter