JYP Entertainment stocks skyrocket 70% in three months

Shares of JYP Entertainment Inc. have been skyrocketing in recent months. The record label stocks jumped more than 70% from its lowest price point so far this year.

Analysts forecast South Korea’s entertainment juggernauts to show strong performance as countries around the world are opening up their borders. Large scale concerts and tours are expected to resume in most Western nations. 

JYP shares ended Friday’s trade at 64,700 won ($52.82) per share, up 3.35% from the previous day’s close of 64,700 won. 

The K-pop label and management agency’s shares exceeded the 60,000 won mark on March 30, for the first time since its IPO in August 2001. Its shares fell to as low as 37,600 per share earlier this year. 

Following a 76% hike since then, JYP’s market capitalization jumped from 1.33 trillion won to 2.25 trillion. 

Foreign and institutional investors led the buying spree. As of Jan. 27, foreigners and institutions bought 45.2 billion and 51.6 billion won worth of JYP shares while retail investors unloaded shares worth 95.1 billion won.

IN-PERSON CONCERTS 

The main driver of the price hike is the resumption of offline concerts. 

In the past month, 12 securities firms revealed their target stock prices for JYP. Seven out of the 12 adjusted the number upwards since then.

On Monday, Yuanta Securities Korea set its target for JYP to above the 80,000 won mark. If realized, the entertainment behemoth’s market capitalization will reach 2.8 trillion won and become one of the 10 biggest stocks on Kosdaq, the secondary trading board of Korea Exchange (KRX).

The bullish sentiment is also supported by strong performance. 

Yuanta Securities forecasts Q1 sales and operating profit for JYP Entertainment to have surged 78.3% and 24.9% respectively to reach 57.6 billion won and 176 billion won. 

Compared to other entertainment labels like SM Entertainment Co. and YG Entertainment Inc., Yuanta analysts expect to see improved fandom and business environment for the agency run by J.Y. Park.

“Throughout this year, artists signed with JYP will actively take part in global tours,” Yuanta Securities analyst Lee Hye-in said. “For the first time since 2020 when the pandemic began to take a toll on the industry, in-person concerts will translate to profit.” 

Lee added the record labels’ profit margin is expected to increase on the back of the main artists’ growing fandom. 

The company’s annual operating profit margin in the past three years (2019 - 2021) stands at around 30%, much higher than those of its competitors. 

NEW TALENTS

Analysts at Samsung Securities are also bullish on JYP Entertainment stocks. They expect the reopening of borders would allow for more international tours, which will in turn generate revenue from sale of artist merch and paid content. 

Samsung Securities has set the target for JYP at 72,000 won. 

Choi Min-ha, an analyst at Samsung Securities Co. said: “Twice and Stray Kids continued to solidify their fandom during the pandemic. Itzy’s growth is stable and NMIXX is showing good results.”

Choi evaluated boy band Stray Kids as having great potential. 

Last week, the band debuted at No.1 on the Billboard 200 albums chart with Oddinary, marking not just the first chart-topper for the act, but its first chart entry. 

The Billboard 200 chart ranks the most popular albums of the week in the U.S. based on multi-metric consumption as measured in equivalent album units. The album Oddinary also debuted at No. 1 on the Top Album Sales chart with the largest sales week of any album in 2022, with 103,000 copies sold. 

Write to Eun-hyuk Ryu at ehryu@hankyung.com
Jee Abbey Lee edited this article.