Sangsangin Securities has lowered its target price for JYP Entertainment to 52,000 won, citing that the growth potential of its lower-tier intellectual property (IP) has yet to materialize. The investment recommendation remains a 'buy.'
In a report released on the 19th, analyst Lee Nara stated, "As the enlistment date for Stray Kids approaches and the re-contracting process for TWICE is underway, the lower-tier IP must fill the gap left by the higher-tier IP."
However, the analyst sees potential for growth in the lower-tier IP. Lee noted, "Starting in 2024, new IPs will be introduced annually, expanding the next-generation lineup. The lower-tier IP, NMIXX, is set for its official debut in Japan in the fourth quarter, which is expected to enhance its contribution going forward."
Regarding the third-quarter performance, Lee projected revenues of 237.3 billion won and operating profits of 41.1 billion won, which are expected to fall short of consensus estimates. The analyst explained that the domestic concert schedule included 16 performances, increasing cost burdens, and that the absence of excess profits from Stray Kids' Western tour, which were reflected in the same period last year, adds to the baseline pressure.
Lee also mentioned that some sales from Stray Kids' new album in Western markets and Tokyo pop-up merchandise are expected to be deferred to the fourth quarter. Overall, activities of higher-tier IPs in the second half of the year are anticipated to be reduced compared to 2025, with annual revenues for 2026 projected at 761.5 billion won, reflecting a 7.3% decline from the previous year.
* This article has been translated by AI.
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