NH Investment Raises YG’s Target Price, Focus on BABYMONSTER Debut Rather Than G-Dragon Concerns
The positive impact of BABYMONSTER’s debut will outweigh the negative impact of G-Dragon’s contract expiration?
On June 9th, Lee Hwa Jung, a researcher at NH Investment Securities, raised the target price for YG Entertainment from KRW 96,000 to KRW 105,000. On June 8th, the closing price of YG Entertainment stock was KRW 81,900.
The researcher said, “The concerns regarding G-Dragon have been excessively reflected in the current stock price of YG Entertainment,” and predicted, “It is expected that G-Dragon’s renewing his contract will take place when he resumes music activities from his current hiatus.”
It was recently revealed that the exclusive contract of G-Dragon, who has been with YG since his debut, has ended this year.
On June 6th, YG Entertainment announced, “Currently, G-Dragon’s exclusive contract has expired, but we have a separate agreement for cooperation regarding advertising and other activities. We plan to negotiate additional contracts when he resumes music activities, and YG will spare no support for that.”
The researcher emphasized the need to pay attention to the debut of the upcoming rookie girl group BABYMONSTER and the possibility of a smooth contract renewal of BLACKPINK, rather than concerns about G-Dragon’s exclusive contract uncertainty.
BABYMONSTER is a multinational 7-member girl group scheduled to debut in the second half of this year. They already have over 2.85 million YouTube subscribers, and their pre-released song has already achieved first place on the Billboard Hot Trending chart.
The researcher explained, “BABYMONSTER has succeeded in securing a fandom even before their debut through exposure on their survival content. Taking into account the potential contribution of BABYMONSTER’s post-debut performance, we have raised the performance outlook for YG.“
YG is expected to smoothly conclude the re-contracting with BLACKPINK, who has been active as their artist for 7 years, in August.
YG is projected to achieve sales of KRW 563.7 billion and operating profit of KRW 86.5 billion based on this year’s consolidated basis. This represents an increase of 44.1% in sales and 103.1% in operating profit compared to 2022.
Source: Business Post
