[Seoul Economic Daily]
In order to promote the success of Hybe (352820), which is underwritten by Mirae Asset Securities, a 400 billion won convertible bond (CB) offering, Hybe gathered potential investors and actively emphasized the return of all members of BTS next year. Some in the investment banking (IB) industry have voiced caution against investing in Hybe CB, saying, “We cannot rule out the possibility of additional stock price declines.”
According to the investment banking (IB) industry on the 9th, Mirae Asset Securities held an IR meeting for the issuance of Hive CB on the 4th and highlighted the investment benefits to investors. The meeting was attended by mid-sized private equity fund (PEF) management companies, specialized financial institutions, securities companies’ proprietary capital trading division (prop desk) managers, and some individual investors who were considering investing in equity-linked bonds (mezzanine bonds).
Mirae Asset Securities especially emphasized the fact that BTS will resume full group activities in the second half of next year as the biggest positive factor. In fact, Jimin and Jungkook, who enlisted the latest among BTS members, will both be discharged on June 11 next year. The securities industry predicts that if BTS resumes full group activities, it will generate an additional annual sales of up to 560.7 billion won just from albums and concerts. There is also analysis that Weverse, Hybe's fan community platform, will switch to a paid subscription service by the end of this year, which will also provide momentum for performance and stock price rebound next year.
A Hive official even confidently stated at the event, “Next year, the stock price could exceed 260,000 won.” Hive estimated that its stock price would reach 268,000 won in November next year and 330,000 won in June 2026. Hive’s current stock price as of the 6th is 165,600 won. Considering that the expected conversion price of Hive CB is 199,680 won, it is calculated that a 30% return can be made in one year and a 60% return in one and a half years.
Earlier, Hive decided to issue an additional CB of the same amount to convert the existing CB worth 400 billion won issued in November 2021, and began contacting investors last month. The existing CB has a maturity of 5 years, but early redemption is possible starting in November. Mirae Asset Securities, which led the CB issuance three years ago, has served as the lead manager this time as well. Mirae Asset Securities plans to receive a letter of commitment (LOC) by the first week of next month and issue the CB in the third week. This CB can be converted into common stock from 12 months after issuance to one month before maturity, and a put option (early redemption claim right) can be exercised every six months starting 36 months after issuance.
It is known that many investors who participated in IR responded favorably to the Hive CB investment. Mirae Asset Securities plans to continue the current atmosphere and attract as many investments as possible by the time the LOC is received early next month. An IB industry insider explained, “Investors will pay attention to the movement of Hive’s stock price over the next month.”
However, despite Mirae Asset Securities’ rosy outlook, most other IB industry insiders still evaluated that Hive CB’s investment appeal was low. This is because Hive’s stock price has halved from the 400,000 won range at the time of its listing in 2020, and the CB’s coupon rate and maturity interest rate are both 0%. The expected conversion price (199,680 won) is also a 20% premium over the base stock price. There was also no condition (refixing) to reflect the stock price decline when CB was converted to common stock.
The dismissal of former Adore CEO Min Hee-jin, the controversy over the private life of Hybe Chairman Bang Si-hyuk, and the drunk driving incident of BTS member Suga are also cited as obstacles to CB investment due to internal issues. If Hybe’s stock price falls further due to another controversy, it will be a disadvantageous situation for investors who have to tie up their funds in CB for at least three years.
