Business Korea

Reinforcements Finally Arriving

YG Entertainment: Concerns to Be Resolved

• By Hazell Lee
• January 20, 2023, 13:26

The author is an analyst of NH Investment & Securities. She can be reached at hzl.lee@nhqv.com. -- Ed.

In early January, YG Ent released both a teaser for the launch of a new girl group and plans for G-Dragon’s solo activities. We anticipate that the firm’s biggest weakness (ie, excessive dependence on Blackpink) will soon be resolved. In addition, Blackpink’s contract renewal should go smoothly. We adhere to a Buy rating and TP of W77,000.

Reinforcements finally arriving

We maintain a Buy rating and TP of W77,000 on YG Entertainment (YG Ent).

Since the resolution of an issue related to general manager Hyunsuk Yang at end-December, YG Ent has been strengthening its business overall. Regarding the decision not to renew contracts with some artists, it is believed that the firm is choosing to concentrate its efforts on a core group of main artists. In early January, the company released a teaser for the launch of a new girl group (Baby Monster), alongside the announcement by G-Dragon himself that he will resume solo activities this year. In the case of Baby Monster, members’ performance teaser videos are being released every week to a favorable public response. Concerns over excessive reliance on a single artist (Blackpink) are to be resolved through the addition of a promising new group and G-Dragon.

Blackpink contract renewal only a matter of time

Despite a variety of momentum sources, YG Ent shares remain undervalued to those of peers (HYBE, JYP Ent, SM Ent). As Blackpink’s August contract expiration approaches, related concerns are being reflected. However, we see little need for a negative reaction to this upcoming event, as considering the practical benefits to both the artists and the firm, contract renewal will likely go smoothly. Now is the time to let go of excessive concerns.

4Q22 preview: Beginning of Blackpink world tour effects

We forecast consolidated 4Q22 sales of W145.5bn (+64% y-y) and OP of W23bn (+74% y-y), with both figures to meet consensus.

Ticket and MD revenue related to Blackpink’s world tour (24 shows in the West and 2 shows in Korea) should prove sound. In addition, revenue is to be reflected in relation to Treasure’s Japan tour. In 4Q22, while the only new album release was from Treasure (570,000 copies), deferred sales related to Blackpink’s September album launch were likely recorded. Digital track revenue should also come in sound, as Blackpink’s new album continues to be a hit, and 2H22 revenue for China should be recognized in 4Q22.

Korea Economy

YG Entertainment bullish on stock market observations of "Blackpink's contract renewal"

Input 2023.01.19. 9:45 a.m.

Reporter Shin Min-kyung

view original

Black Pink. Photo = YG Entertainment

YG Entertainment's stock price is showing a strong performance in the early hours of the market on the 19th, thanks to a brokerage report predicting a high possibility of renewing Blackpink's contract.

As of 9:34 am on the same day, YG Entertainment is trading at 51,300 won, up 1,650 won (3.32%) from the previous day.

Previously, on the same day, NH Investment & Securities issued a YG Entertainment stock analysis report and observed that there was a high possibility of renewing the contract with Blackpink. Lee Hwa-jeong, a researcher at NH Investment & Securities, said,“The fact that the stock price is still undervalued compared to competitors even though there are several momentums is a reflection of concerns as Blackpink’s contract expiration date approaches, which is until August this year.”

There is no need to guess and react. Blackpink's contract renewal is expected to proceed smoothly, so it is time to put down excessive concerns."

In addition, with the new girl group 'Baby Monster' and G Dragon's activity plans being recently revealed, Lee also diagnosed that the company's problem of 'excessive dependence on a single artist', which had been pointed out so far, has been resolved.

Meanwhile, on the same day, YG Entertainment first released the dance performance video of 'Baby Monster' on its official blog. The video contains scenes of five members Luca, Haram, Asa, Laura, and Ahyeon practicing their dance.

Business Post

Market and Money Characteristics

YG Entertainment's share price bullish during the intraday, expectations for a new girl group and GD's solo are positive

Reporter Lee Han-jae piekielny@businesspost.co.kr 2023-01-19 11:41:00

[Business Post] YG Entertainment's stock price is showing a bullish intraday. Investor sentiment seems to have improved due to expectations for a new girl group and GD (G-Dragon) solo activities.

▲ On the 19th, YG Entertainment's stock price is showing a bullish trend. The photo is a teaser video of YG Entertainment's new girl group 'Baby Monster'.

At 11:30 am on the 19th, YG Entertainment's stock price is trading at 51,800 won on the KOSDAQ market, up 4.33% (2,150 won) from the previous day. YG Entertainment's stock price rose 0.50% (250 won) to 49,900 won, and increased the rate of increase. At the same time, the KOSDAQ index fell 0.21% (1.49 points) to 710.26.

The prospect of the securities industry that the dependence on Blackpink may decrease seems to stimulate buying sentiment. Lee Hwa-jeong, a researcher at NH Investment & Securities, said in the report, "In early January, a teaser for the launch of the new girl group 'Baby Monster' and plans for GD (G-Dragon)'s solo activities were released." It will,” he predicted.

Researcher Lee said, "YG Entertainment has been accelerating its overall business since issues related to general manager Yang Hyun-suk were resolved at the end of December." It’s time to see.” Researcher Lee maintains YG Entertainment's investment rating of 'BUY' and target price of 77,000 won. Reporter Lee Han-jae

NewsWorks

NHK "YG, possibility of renewing BLACKPINK's contract increases... Concerns overblown"

• Reporter's nameCorrespondent Yuhansae

Black Pink. (Photo courtesy of YG Entertainment)

[Newsworks = Reporter Yoo Han-sae] As YG Entertainment's Blackpink contract expired, the share price was undervalued compared to its competitors, but this was due to excessive concerns, and the stock market predicted that the contract renewal was highly likely.

On the 19th, NH Investment & Securities said that the excessive dependence on a single artist from YG Entertainment would be resolved, and that Blackpink's contract renewal would go smoothly. We maintain our Buy rating and target price of KRW 77,000. The closing price of YG Entertainment on the previous trading day is 49,650 won.

After the issue related to Yang Hyun-suk was resolved at the end of last December, YG Entertainment's business as a whole accelerated. They are showing a desire to organize some artist lineups and accelerate business progress centered on key artists.

At the beginning of this month, a teaser for the launch of the new girl group 'Baby Monster' was released, and in the case of GD, he himself announced that he would resume his solo activities within the year. In the case of Baby Monster, the public's reaction is generally favorable in a situation where the members' performance teaser videos are released every week.

Lee Hwa-jeong, a researcher at NH Investment & Securities, said, "This is a period where the excessive dependence on a single artist is resolved as new artists are added to support GD."

He said, "Despite the existence of various momentum, YG Entertainment's stock price is still undervalued compared to competitors," he said. "As Blackpink's contract expiration (August 2023) approaches, related concerns are reflected."

Researcher Lee drew the line that there would be no need to anticipate and react negatively in relation to BLACKPINK's contract renewal. He explained, "Considering the practical benefits of both the artist and the company, the renewal of the contract will go smoothly," adding, "It is time to put down excessive concerns."

Researcher Lee predicted that YG Entertainment's consolidated sales in the fourth quarter of last year would increase by 64% year-on-year to KRW 145.5 billion, and operating profit would increase by 74% year-on-year to KRW 2.3 billion.

He said, "We expect good results by reflecting the ticket and MD revenue related to the Blackpink world tour," and "Treasure's Japanese tour-related revenue will also be recognized."

"In the case of new releases, there was only Treasure (570,000 copies), but it is understood that deferred volume related to Blackpink's album released in September will be reflected." As this is the quarter in which this is recognized, good music results will continue."

OSEN

Treasure➝Baby Monster, expectations for YG siblings[Oh!Ssen focus]

Enter 2023.01.18. 5:01 p.m.

Reporter Seon Mi-kyung

[OSEN=Reporter Seon Mi-kyung] From Treasure to Baby Monster, 2023 is the year YG siblings are expected to perform.

Since 2023 will be YG Entertainment's big plan, global fans' expectations are rising. Following Blackpink's world-class moves, the youngest line, Treasure, and Baby Monster, who are stepping up their debut preparations, are YG's full-fledged projects. Treasure, which debuted in August 2020, is accelerating its global journey. This is YG's first group after 4 years since BLACKPINK. Proving the team's identity with their skills, they are attracting attention as a team that steadily grows step by step. They are getting a good response as a team that has solid music and performance. In particular, Treasure successfully completed their first Japanese arena tour for two months last year, and will enter Osaka Kyocera Dome on the 28th and 29th to hold a special performance. Then, starting in March, they will hold an Asian tour in the order of Kuala Lumpur, Jakarta, Bangkok, Singapore, Manila and Macau, starting with Taipei, to gain global popularity. Treasure is considered a team that makes them look forward to their future steps while showing their skills and solid growth through performances. Because they show steady growth, they are the youngest line in YG.

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Along with Treasure, a rookie girl group called Baby Monster is playing a key role in YG's plan this year. YG's new girl group launched 7 years after BLACKPINK, and consists of 7 final members who received professional training for 4 years. Baby Monster, most of whom are in their teens, announced their debut in the new year, and are raising expectations by revealing 15-year-old members Haram and Ahyeon.

Above all, Baby Monster is a highly anticipated team as they are receiving rave reviews from producer Yang Hyun-suk, as well as from YG divisions such as Blackpink and Winner. The revealed members draw attention as they reveal their presence as 'all-rounders' in the future with their overwhelming skills. Baby Monster is attracting attention from all over the world, surpassing 40 million views with just the launching teaser content.

In particular, both Treasure and Baby Monster are expected to build a more solid presence this year under the general direction of producer Yang Hyun-suk. Producer Yang Hyun-suk, who has returned to his main job, is said to be working hard by leading the launch of Treasure and Baby Monster. As it is the first girl group launched since Blackpink, it is expected that they will continue the legacy of YG's authentic girl group under the direction of producer Yang Hyun-suk.

Above all, the fact that they are a junior group along with Blackpink's global move makes Treasure and Baby Monster more noteworthy. The birth of a more overwhelming team is expected under the direction of producer Yang Hyun-suk, who raised Blackpink. /seon@osen.co.kr

[Photo] Provided by YG Entertainment

Could see some more announcements this week.

Quote from kazuyakamenashi

Stocks going up because YG returned, is not surprising and nobody should be upset because this is life. A business is a business that is a business and what are companies all about? Money$$$$. The investors are people too just like you, someone may have their life savings in it, and a good valuation could be the difference between living comfortably and starving the next. Most people damn near all people will do what is best for themselves before anyone else, so any virtual signaling bullshit take a back seat when in comes to ME first and that's true for the vast majority of people on the planet. So them feeling better about the investment with him returning makes sense YG has been the primary driving force for increasing the stock value of the company, because he's a producer and artist first as well as a company CEO.

Agreed. YHS is behind the biggest trends ever in Kpop. I think especially new Kpop fans would be surprised that things they consider normal staples in Kpop were started by YG.

Aside the fact that he was in the group that is universally recognized as the group that STARTED KPOP...Seo Taiji and Boys.

Plus his brother, Yang Minsuk, is back as co-CEO...who turned YG into the international business behemoth that it became.

So understandably investors are excited.

Quote from purepalette

Does this mean yg ent will be every active this year?

Looks like it.

Quote from nevermindmejin

And why the sudden insert of Treasure? Lol.

They're currently on a sold out tour nearing 600k attendees which happens to be their 1st tour ever.

Also the 1st 4th gen to sell out BOTH the KSPO and Kyocera Domes.

Being that touring is the biggest money-maker in music...seems TREASURE is going to be dominant.

So BLACKPINK and TREASURE currently the ones making huge amounts of income is a big deal. BLACKPINK's endorsement deals are obvious and numerous, but TREASURE has a huge amount of them too.

And TREASURE and Stray Kids seem to be the only 4th gen boy groups that get good views anymore.

Lol?

Quote from HardcoreBLINK

YG earnings & stocks after born pink era ends & BP dips to TBL will be interesting to witness

2024 will be a fresh start for YG fo sure 😌

TBL is YG.

YG gave them their old building. There's even a tunnel connecting the 2 buildings.

When TBL goes public this year YGE, Yang Hyunsuk, Yang Minsuk, Teddy and Naver will be the largest stakeholders.

I hope people realize that YG transferred Taeyang to THEBLACKLABEL to boost their profile before they go public. THEBLACKLABEL will be making a lot of noise this year by design. I believe some of the older YG trainees that didn't make it into BabyMonster is going to debut under THEBLACKLABEL.

Quote from Slayurfaves

I don't dislike treasure but comparing them to blackpink the way YG stans like to invalidate bp's biggest contribution to YG. Blakpink's tour is bigger be serious it's not only endorsement deals

Quote from chilean-stan1

Lmao, Treasure? BP is the sole and biggest breadwinner with the Born Pink World tour, 200m in revenue in comparison to 10m at most, the mediaplaying for the bgs is HILARIOUS to see

Didn't discredit anyone. Let's be clear, BLACKPINK is the vast majority of income made under the YG music label. They are THE representative artist for YG.

Just stating, BLACKPINK and TREASURE are the ones that are making the income right now as the financial experts are stating.

BLACKPINK is hitting 1.1 million tickets sold on their world tour.

TREASURE is hitting 500k tickets sold on their tour with more shows to be added.

Link

And 60 movie theaters sold out to watch their concert.

Link

BLACKPINK sold 2.6 million albums last year.

TREASURE sold 1.3 million.

Link

Also understand, the music label is just 1 part of YG. YG is a multinational company with a dozen subsidiaries.

It's being predicted that YG is about to break revenue records and have their highest revenues in their 26 year history. A year after doing that last year.

YG revenue is estimated to have made $342 million in revenue last year.

While the music label contributes a vast majority of that, YG's other businesses also contribute a big part of it too.

But as the experts in the articles are stating, YG is focusing on a core group of artists. And while I'll always love Daesang and iKON and have a lot of great memories of them and will continue to support them, I believe some business decisions were made and as the experts stated, the core group of artists will be the focus of YG:

BLACKPINK

GD

TREASURE

BABYMONSTER

with WINNER and AKMU contributing as well.

Bumping this due to the fraudulent rumors.

This is why I get out ahead of these and post legitimate sourced material.

bump again

Quote from HardcoreBLINK

TBL is an associate company so not really the same as a sub-label

YG only owns 30% while Teddy over 50% so yes YG will still get a pie of BP earnings(especially since they will still distribute BP albums through YG+) but it won't be like anything before & their stocks will fall while TBL will rise

We actually don't know how much of THEBLACKLABEL label YG owns as there aren't public records.

YG is looking for THEBLACKLABEL to be as successful as YGPlus. THEBLACKLABEL is like a mini YG, they have their own roster of artists, producers, actors and models.

But it is correct that THEBLACKLABEL went from a subsidiary to an associated company of YG in November of 2021.

This was most likely planned by YG and Teddy.

No, it's not likely that Teddy will own 50% of THEBLACKLABEL after it goes public, that is waaay too much for a public company.

Yang Hyunsuk has majority ownership and voting power in YGE and he owns about 17%.

The idea from an IPO is to bring in a revenue stream of new investment. Teddy having 50% would not make sense with that.

THEBLACKLABEL will likely be like YGPlus.

The YGPlus breakdown of ownership is...

YGE owns 30% and Yang Minsuk, YG's brother and CEO of YGE, personally owns 3.5% of YGPlus. Yang Hyunsuk used to have personal stock in YGPlus but cashed out his shares a couple of years ago and made a reported $10 million.

GD and Taeyang also own a large amount of stock in YGPlus.

The plan is that THEBLACKLABEL will turn into another YGPlus, which has been a very influential business YG made.

My guess is that YGE, Yang Hyunsuk, Yang Minsuk, Teddy and Naver will get first dibs on an IPO.

Right now Teddy and THEBLACKLABEL's new CEO who was specifically hired to help TBL go public since he has experience in that, is going to various venture capitalist firms and presenting what an IPO will look like.

If I had to throw a number out there of the ownership and stock structure when they go public. Teddy may get about 12%, YGE about 9%, Naver about 8%, Yang Hynsuk and Yang Minsuk about 3% each.

YG transferred Taeyang to THEBLACKLABEL to create a buzz for them before they go public to draw investor attention.

Bumping again to stay ahead of fraudulent rumors.

Bumping to fight/discredit false narratives.

Pushing facts back to the top.

Quote from killingtime1934

so like I said before

this article was widespread unlike the other one of the "beating rumors"

tho this didnt trend unlike the other one, and it must be bc of the type of title it has

Agreed, I might change the title given the spread of misinformation from 1 article.

Mine is sourced with several articles from legitimate news agencies and actual inside industry sources and financial experts.

will keep this thread active as a source for facts surrounding this issue.

Edited the title to be clear about current rumors.

Will edit back because the stocks did see a positive impact due to all the other stuff...GD Comeback, Yang Hyunsuk return, BabyMonster debut and TREASURE tour.

Bump

Quote from Slayurfaves

why do people trust questionable sources instead of this source? people live for drama I swear

Agendas

Seems like a majority of my time is spent correcting people.

A lot of new Kpop fans...I guess i consider anyone who started following Kpop in 2016 or later...are misinformed because we allow false narratives to continue without getting checked.

And for whatever reason there are many false narratives about YG.

And since i have a lot of knowledge of YG and YG's history I'm in a position to correct it backed up with facts. It's why I'm starting back my YG Business and News thread.

Thankfully most people respond positively and thank me for the info because they genuinely didn't know.

But it does become exhausting doing it all the time.

bump

keeping facts at the top

Quote from BEYBLADE

whoa

Yeah. Definitely different from the untrue rumors out there.

Guess I need to bump this again.

Time to bump my thread again

Seems the AKP main propogandist is spreading fake news with questionable sources.

bump