Entertainment Sector Plunges Amidst 80% KOSPI Rise; All Four Major Agencies See Lowered Target Prices

As the KOSPI index has risen by over 80% this year, the entertainment industry has moved in exactly the opposite direction. Share prices of major agencies such as HYBE, SM, JYP, and WGY Entertainment have dropped significantly compared to their levels at the start of the year, causing overall investor confidence in the sector to wane.

On the 10th, Hana Securities issued a report titled “Entertainment: Prices Have Become Unsustainable,” in which it simultaneously reduced the target prices for these four agencies. HYBE’s target price was lowered from 400,000 won to 350,000 won, SM’s from 140,000 won to 124,000 won, JYP’s from 90,000 won to 79,000 won, and WGY Entertainment’s from 76,000 won to 63,000 won. Lee Ki-hoon, a researcher at Hana Securities, stated, “Given the large gap between current stock prices and target prices, we have lowered targets for all four agencies.”

The decline in these agencies’ share prices since the beginning of the year has been steep. From January 1st to the 9th, HYBE’s shares dropped by approximately 40%, YG Entertainment’s by 36%, SM’s by 28%, and JYP’s by 14%. The current stock prices are 206,500 won for HYBE, 73,300 won for SM, 53,500 won for JYP, and 41,150 won for WGY Entertainment.

The weakening of the sector is attributed to increased investment flows toward semiconductor and AI-related stocks. Im Soo-jin, a researcher at Kiwoom Securities, explained this as “the impact of market conditions caused by concentrated capital inflows into specific growth sectors like semiconductors and AI, combined with geopolitical risks.” Individual company issues also posed challenges. HYBE faced concerns related to BTS, while YG was criticized for having limited new talent development since BLACKPINK.

However, current stock prices are still considered low when compared to past crisis periods. Lee Ki-hoon noted, “The stock prices of these four entertainment agencies are down by up to 30% from their historical lows during periods such as the Hanban ban and ‘No Japan’ policies—HYBE’s price is now 30 times lower, and those of the other three agencies are 15 times lower. This indicates significant undervaluation that should be taken into account.”

Several positive factors could drive stock price recovery in the second half of the year. For HYBE, renewed global world tours by BTS, stadium tours in North America, Europe, South America, and Southeast Asia, and increased sales of merchandise are expected to play a key role. There are also rumors that NewJeans may make a full-four-member comeback in October. Additionally, by 2028, large-scale tours by SEVENTEEN, NewJeans, KATSEYE, and CORTIS are projected to generate additional revenue of around 500–600 billion won for these groups alone. SM is expected to see strong performance driven by aespa’s world tour starting at the Gochek Sky Dome in Seoul in August and the comeback of RIIZE. For YG, the comeback of BIGBANG in the third quarter and the launch of a new boy group are key factors. JYP’s performance is expected to improve thanks to increased concert revenue centered around TWICE and the announcement of STRAYKIZ’s world tour.