JYP Entertainment Dropped Targets as GOT7 Contract Expires

KB Securities announced on the 22nd that it has lowered JYP's target stock price from 55,000 won to 51,000 won due to the expiration of its contract with GOT7 and the increase in market risk premium.

Still, the investment opinion has maintained its purchase considering the current stock price level and its ability to rise. The current target price is 34.7 percent higher than the previous day's closing price of KRW 37,850 at JYP Entertainment.

Researcher Lee Sun-hwa explained the background of the target stock price adjustment, saying, "As GOT7's contract expires, we slightly lowered JYP's net profit estimates for this year and this year's market risk premium was raised to 5.93% and 7.37%."

However, she said, "This year, we should pay attention to the overseas activities of rookies," and added, "It is a time when the NiziU performance is reflected in earnest and the rapid growth of Stray Kids, which has surpassed 1 million albums per year in Japan."

"ITZY will accelerate its overseas activities by releasing its first English album since its debut," he said. "If the proportion of overseas activities increases, the profit margin will improve as royalty sales increase."

"JYP will continue to seek new growth engines with TWICE, which acts as a cash cow by continuously introducing the rookie group," he said.

It is predicted that JYP made 40.2 billion KRW in sales and 11.9 billion KRW in operating profit in the fourth quarter of last year based on consolidated financial statements. This is a decrease of 9.3 percent and 12.0 percent, respectively, compared to last year.

 

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