HYBE’s Stock Drops 18% Despite BTS’s Two Consecutive Weeks at No. 1 on Billboard

BTS has held the top spot on Billboard’s main album chart, the Billboard 200, for two consecutive weeks, with initial sales exceeding 4 million copies. Yet, its parent company HYBE’s stock continues to show weakness. The share price fell by 18.18%, from 330,000 won at the end of last year to 270,000 won as of the 6th, and it dropped another 30.32% since the outbreak of the Iran conflict.

This contrast sharply with the performance of the KOSPI index during the same period, which rose by +27.60% or fell by -13.88%. Despite strong actual revenue indicators such as album and music streaming sales following BTS’s Comeback, excessive selling pressure has pushed the stock price to an unusually low level. The securities industry attributes this to potential increases in operating costs due to geopolitical uncertainties and a general deterioration in market investor sentiment.

I Hwa-jeong, a researcher at NH Investment & Securities, stated that the current stock price is clearly in an oversold range. She noted that the expected Price-Earnings Ratio (PER) for this year is 26 times, which is at a historically low level according to band chart standards. She added that there are ample drivers for stock price increases, including the stability in performance guaranteed by BTS’s activities over the next two years, the entry of fourth- and fifth-generation artists into contributing significantly to earnings, and KATSEYE’s transition to profitability.

First-quarter results also turned out strong. Consolidated sales reached 653.7 billion won, up +31%, and operating profit reached 63 billion won, up +191%, exceeding market expectations. Analysts believe that despite the higher settlement costs related to BTS’s contract renewal, the economies of scale will have a significant impact.

Park Sung-ho, a researcher at LS Securities, said it is now time for the strongest performance momentum triggered by BTS’s Comeback to fully take effect. He raised his target price for HYBE to 480,000 won. He explained that even though details for 82 concerts in the first world tour have already been announced, the upward trend in earnings estimates will continue through the second half of the year, as there are still sufficient factors supporting higher performance.

Kim Ji-hyun, a researcher at ShinYong Securities, said the current stock price is comparable to the level it was during BTS’s military enlistment and the dispute over the termination of NewJeans’s contract. She emphasized that with initial album sales of over 4 million copies and 82 concerts alone, record-breaking performance is achievable. However, she pointed out KATSEYE’s uncertainties as a risk, mentioning speculation about member Maon’s suspension from activities.

Regarding concerns over rising costs due to the Iran conflict, she stated that since concert schedules through September have already been finalized, it is likely that most major contracts have been secured. The impact of potential cost increases in some uncontracted details will likely be limited.