Monday, November 18

K-pop companies mainly had a hard time in 3rd quarter– however 2025 might bring monetary healing

JYP Entertainment’s young boy group Stray Kids goes to the 2024 SBS Music Awards Summer in Seoul. The group’s activities has actually provided its moms and dad business a “remarkable rebound to success”

The Chosunilbo Jns|Imazins|Getty Images

K-pop services primarily continued to have a hard time in the 3rd quarter of the year, with 3 of South Korea’s 4 biggest firms publishing poorer monetary outcomes compared to in 2015.

The K-pop market has actually been seeing a downturn due to decreasing album sales and the lack of exercise of record-breaking groups such as Blackpink and BTS. Members of BTS have actually been serving their necessary military service, while Blackpink just revealed to reunite as a group in 2025.

Streaming income, a minimum of throughout the very first half of this year, has actually been not able to cover the loss from album sales.

Shares of SM Entertainment, JYP Entertainment and YG Entertainment, noted on the small-cap Kosdaq have actually lost 16%, 43% and 10.41%, respectively up until now this year, while Hybe, noted on the blue-chip Kospi, has actually seen its stock drop over 11% year to date.

Here’s how the “Big Four” K-pop business fared in the 3rd quarter:

Hybe, the biggest K-pop business by market cap, did not information the factors for its downbeat revenues, however a Nov. 6 note released by Yuanta Securities expert Hwan-wook Lee stated sales diminished due to minimal artists and activities throughout the 2024 Olympics, while success was likewise injured by greater expenses owed to the launch of KATSEYE, a localized group in the U.S.

SM Entertainment CFO Jang Jeong Min stated throughout the business’s revenues call that profits reduced due to a decrease in album sales, while running revenue was likewise weighed down by production expenses of a launching program and weaker incomes from subsidiaries.

Samsung Securities experts Minha Choi and Yeonghoon Kang stated in a Nov. 11 note that YG Entertainment’s operating loss was “not unexpected,” as the business’s artists were fairly “non-active.” For the 3rd quarter, simply Babymonster– a novice group– and solo artist Lee Seunghoon launched product.

JYP Entertainment was the only brilliant area in the market, as it saw a “remarkable rebound to success” and tossed an “profits surprise,” according to a Nov. 14 note released by NH Securities. The note stated this was because of “full-fledged” activities by kid group Stray Kids, which began its world trip in the 2nd half of 2024.

Healing in sight?

While K-pop financiers may wish to put 2024 behind them, provided miserable year-to-date stock returns and mostly bad monetary outcomes, they can anticipate 2025, research study company Citi Research recommends.

Citi experts John Yu and Alicia Yap stated in a note previously this month that they are “turning positive” on the sector, as its earnings was set to speed up.

On a year-on-year basis, Citi anticipates that the aggregate income of the Big Four firms to grow by over 21% in 2025 and almost 15% in 2026.

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