The author is an analyst of NH Investment & Securities. She can be arrived at at [email protected]. — Ed.
YG Ent registered an earnings surprise for 2Q21. Its income advancement endurance is strengthening on both of those the expansion of the fandom and the begin of HYBE album and tunes sales. We increase our TP to W85,000 in consideration of both equally promising development prospective following the start of complete-fledged fandom business enterprise and the firm’s ongoing secure album and tunes revenue. We go on to recommend YG Ent as our sector top decide on.
Offers abundant upside probable and more robust earnings stamina
We elevate our TP on YG Enjoyment (YG Ent) from W71,000 to W85,000, reflecting: 1) a alter in our foundation year to 2022 and 2) boosted earnings estimates in light of brisk fandom small business pursuing the Weverse collaboration and the complete-fledged results of HYBE album and audio revenue at a subsidiary.
We retain a Get ranking, continuing to provide on YG Ent as our sector top rated decide. The firm offers an eye-catching mixture of steady earnings and promising development prospective many thanks to: 1) the resumption of offline concerts and 2) high upside possible relevant to fandom organization enlargement. Additionally, its quarterly earnings energy is being enhanced by a subsidiary’s HYBE album and tunes distribution deal. Lineup growth via the debut of a new lady team signifies an additional favourable.
Blackpink’s tends to make entry into Weverse Shop: Fandom enterprise revenue to commence in earnest
Blackpink secured 1.7mn subscribers in 10 times from its entry into Weverse on Aug 2, and products income began on the system on Aug 6. Similar sales are anticipated to be maximized in line with two comebacks (Blackpink and a solo album for Lisa, a member of Blackpink) in 2H21. Based mostly on on-line concert ticket income at the starting of the 12 months, assuming an common month-to-month paying out users of 250,000 and ARPPU of W70,000 in 2022, we anticipate the firm’s quarterly commission revenue from Blackpink-linked revenue on Weverse to access all over W8bn. A sizeable contribution to OP is anticipated even if artist royalties are taken into account.
2Q21 assessment: Registers earnings shock, even without routines
YG Ent recorded an earnings surprise in 2Q21, delivering consolidated revenue of W83.7bn (+56% y-y) and OP of W10.5bn (+277% y-y).
Headquarters: Electronic income for older albums were brisk in spite of the absence of any exclusive gigs and overall performance. As a end result of the maximize in the sizing of fandom for the main lineup, product sales endurance seems to be strengthened. The Lisa solo album launch is scheduled for 3Q21
Subsidiary: Contributing to the overall earnings shock ended up YG PLUS’s HYBE album/new music distribution effects. In 3Q21, earnings expansion is to be spurred by the two the launch of a new BTS album and the launch of Blackpink’s 5th anniversary goods at Weverse Shop.