A visitor takes a photo at the main building of HYBE in central Seoul, Feb. 10. Yonhap
The entertainment industry is projected to see strong growth next year, driven by the anticipated comebacks of major acts like BTS and BLACKPINK, according to brokerage houses Tuesday.
In particular, Daishin Securities advised investors to increase their holdings in entertainment stocks, naming HYBE as the top pick and SM Entertainment as the second favorite.
“This year, the entertainment industry faced continuous issues, starting with the HYBE-Ador conflict in April. Additionally, album sales, which had been growing for over a decade, began to decline,” Daishin Securities analyst Lim Soo-jin said. “However, with growing optimism about next year's prospects, stock prices have recently started to recover.”
Lim noted that the comebacks of BTS and BLACKPINK, the revival of fan base competition dynamics and the monetization of newer intellectual properties are expected to fuel growth in album sales.
“Last year, BTS and BLACKPINK together accounted for 14 percent of the total domestic album sales,” she said. “Their anticipated attendance for upcoming world tours is expected to surpass the combined tour attendance of all artists under their respective agencies, signaling significant growth potential.”
Additionally, Lim pointed out, the combined YouTube subscriber count of the two groups stands at 170 million, suggesting not only strong interest in their comeback albums but also a potential increase in global attention toward K-pop as a whole.
The analyst expected the average revenue of the four major entertainment companies — HYBE, SM, JYP Entertainment and YG Entertainment — to increase by 31 percent next year compared to this year, with operating profits projected to surge by 93 percent.
BTS member J-hope greets fans after being discharged from his mandatory military service outside a military base in Wonju, Gangwon Province, Oct. 17. AFP-Yonhap
JYP already delivered an earnings surprise in the third quarter, with revenue reaching 170.5 billion won ($122 million) and operating profit at 48.4 billion won, significantly surpassing market expectations.
The securities industry predicted that JYP will continue to gain stock price momentum from the comeback of its artists and large-scale world tours. Hana Securities raised its target price for the company from 74,000 won to 78,000 won, while Samsung Securities adjusted its target from 71,000 won to 75,000 won.
“Previously, disappointment from consecutive earnings shocks had JYP be overlooked in the market for some time. However, this time, it demonstrated a recovery in profitability, and there is growing attention on the momentum driven by upcoming rookie artists,” Samsung Securities analyst Choi Min-ha said.
Eugene Investment & Securities analyst Lee Hyun-ji echoed the view, saying that JYP plans to actively conduct tours across various regions alongside comebacks of major artists in the fourth quarter.
“Additionally, the debut of a new boy group is scheduled for the end of the year, providing ample momentum for further stock price growth,” Lee said.
As for YG, Hana Securities projected that the firm would post an operating loss of 19 billion won this year, but is expected to turn profitable next year with an operating profit of 45.6 billion won, driven by the consecutive comebacks of its artists.
Raising its target price for YG from 49,000 won to 53,000 won, the brokerage estimated the operating profit for 2026 at 63.4 billion won.