K-Pop Entertainment Big 4 Stock Prices Drop 17–35% in One Month Due to Declining Performance and Capital Outflows

The “Big 4” entertainment companies in South Korea are all facing simultaneous stock price declines. Despite K-pop’s strong performance in global markets, investors remain cautious. Capital is flowing out not only from individual stocks but also from related exchange-traded funds (ETFs), raising concerns about worsening profitability across the industry.

According to KOSCOM ETF Check on the 15th, over 90 billion won worth of capital has flowed out of the “ACE KPOP Focus ETF” since the beginning of the year. The fund’s return rate reached -25% during that period, placing it at 773rd out of 792 total ETFs, in the lowest tier. This ETF holds more than 90% of its assets in four stocks: JYP (about 27%), SM (about 26%), HYBE (about 21%), and YG Entertainment (about 19%).

Individual stock price declines are also severe. Since the start of the year, SM Entertainment’s stock has fallen by 34.8%, while HYBE and YG Entertainment have dropped by 25.6% and 17.8%, respectively. Target prices for SM’s stock have been lowered by several securities firms, and HYBE’s target price has also dropped from the previous 500,000 won range to around 380,000 won. Yuanta Securities set HYBE’s target price at 370,000 won.

Worsening profitability is cited as the main factor. Although HYBE recorded its highest sales ever at 2.65 trillion won in 2025, its operating profit dropped to 49.9 billion won, a 74% decrease from the previous year. This reflects rising operational costs such as album and tour production expenses, as well as performance in improving profitability falling short of expectations. Overreliance on the supergroup BTS is also identified as a problem.

The lowered expectations among securities firms are also affecting market sentiment. For SM and HYBE, all 9 securities firms that issued reports reduced their target prices, while 6 firms cut YG’s target price and 3 firms adjusted JYP’s target price downward.

However, the securities industry expects performance improvements to begin in the second quarter. Analysts suggest that the first quarter was marked by weak activity from these companies’ artists and the upfront costs associated with album and tour preparations. In particular, JYP managed to maintain some resilience due to the partial impact of TWICE’s tours, while HYBE is expected to see performance growth starting in the second quarter as BTS’s “ARIRANG” world tour ramps up. YG and SM are hopeful for improved results driven by increased artist activity in the second half of the year.