K-pop label JYP Entertainment earnings disappoint; shares down

JYP Entertainment Corp., the music label behind K-pop bands Stray Kids, Twice and NiziU, saw its stocks drop on Monday due to its disappointing quarterly profit figures.

Shares fell 8.3% to close at 119,000 won ($89.4) on Aug. 14. They dipped as low as 113,300 won earlier in the day.

The entertainment agency’s second-quarter operating profit jumped 88% on-year to 45.6 billion won, but it missed its 51 billion won earnings estimate.

The company’s content production costs and employee bonuses more than doubled from a year ago, impacting its profit, wrote Hanwha Investment & Securities Co. analyst Park Soo-young in a Aug. 14 report. The stock, which has increased some 84% since January of this year, could temporarily underperform, Park added.

“The local entertainment industry will slow next year as album sales and resumption of live concerts recently drove the rapid growth of the sector. From a conservative view, growth in album sales could slow – it is now critical to raise the success ratio of music sources, digital content, concerts and merchandise in North America and Europe,” said Park.

“Some 30% of JYP’s quarterly revenue is generated from the Americas as the company, via a partnership with US label Universal Music Group division Republic Records, has increased the intellectual property of Twice and Stray Kids in the region. JYP is forecast to expand its presence in the West and to maintain lower profit volatility than its competitors,” Park added.

YG Entertainment Inc., the label behind Blackpink and Big Bang, slid 0.24% to close at 81,500 won on the same day. It posted 28.9 billion won in operating profit for the second quarter, about 3.1 times a year ago, and 158.2 billion won in revenue, more than double on-year.

SM Entertainment Co., K-pop pioneer and agency of NCT and aespa, rose 0.15% to close at 136,700 won. The company, involved in a management feud earlier this year, posted robust second-quarter figures such as 35.7 billion won in operating profit, up 84% on-year, and revenue of 239.8 billion won, up 30% from a year ago.

Write to Sang Hoon Sung at uphoon@hankyung.com


Jihyun Kim edited this article.