Shinhan Investment Corp. announced on September 4 that it has lowered its target price for Nomus from 27,000 won to 16,500 won, reflecting a decline in market multiples despite expectations for improved performance in the second half of the year due to the resumption of overseas tours and increased platform revenue. The investment opinion remains a 'buy.'
Heo Seong-kyu, a senior researcher at Shinhan Investment Corp., stated, "The absence of major performances in the second quarter and some one-time legal costs related to civil lawsuits were reflected in the results. However, the overseas tour schedule is set to resume in earnest from the third quarter, and we expect a continued upward trend in revenue compared to the previous quarter."
Nomus reported second-quarter revenue of 16.1 billion won, a 0.7% increase from the same period last year, while operating profit fell 15.9% to 3.5 billion won, resulting in an operating profit margin of 22%. Despite a decrease in performance revenue, platform revenue rose to 5.8 billion won, a 19.9% increase year-on-year.
The growth trend in the platform business is expected to continue. Heo noted, "With the entry of Seong Han-bin in the second quarter and a 168% increase in paid subscribers in the Chinese market, the annual revenue growth guidance for the platform has been raised from 20% to 40%. Discussions are also underway for the entry of major IPs, with platform revenue projected to reach 8.1 billion won in the third quarter and 10 billion won in the fourth quarter, nearly doubling compared to the first half of the year."
He added, "The second half of the year will see a concentration of global performances, leading to expected growth. Upcoming events include the U.S. tour of Woos and JAY B, as well as domestic performances by Fromis_9, with projected performance revenue of about 22.1 billion won for the second half of the year."
He also estimated that the total audience for performances will increase from 149,000 in 2024 to 206,000 in 2025, and reach 300,000 in 2026.
Heo explained that the issuance of convertible bonds worth 40 billion won is intended not for the purpose of covering receivables but for raising capital to secure major IPs in the future. He noted that while annual revenue estimates are expected to trend upward, the target price has been lowered due to a general decline in market multiples, with potential for reevaluation depending on future market conditions.
* This article has been translated by AI.
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