We might be witnessing the downfall of YG Entertainment in real-time. As you may know, YG Entertainment’s biggest group, BLACKPINK, has not been very active as a group lately.
The group’s last album, “BORN PINK,” was released in 2022, and their latest tour, “BORN PINK WORLD TOUR,” concluded on September 17, 2023.
While all four members—Jennie, Jisoo, Rose, and Lisa—have been active as individual artists under their own labels, group activities have been minimal to non-existent. This absence has led to a significant drop in YG Entertainment’s profit.
Recently, Kim Hye Young, a Daol Investment & Securities researcher, analyzed YG Entertainment’s sales and profit.
Hye Young stated, “YG Entertainment’s consolidated sales for the second quarter of this year will decrease by 35.8% year-on-year to 101.7 billion won (approximately $73,521,000 USD), and operating profit for the same period will decrease by 98.9% to 300 million won (approximately $217,000 USD).”
” YG Entertainment’s main performance in the second quarter will be the album sales of ‘Baby Monster’ and the concert sales of ‘Treasure’,” and “There are only two idol IPs that YG Entertainment can promote this year , including the rookie Baby Monster, which is disadvantageous in terms of profit.
We should expect performance next year rather than this year.” Researcher Kim lowered the target stock price for YG Entertainment from 55,000 won to 46,000 won.
Previously, YG Entertainment and BLACKPINK renewed their contracts for group activities, but not all members renewed their contracts for individual activities. Accordingly, the securities industry analyzed that the lack of clarity about BLACKPINK’s group activities is simultaneously pulling down the stock price and performance.
Researcher Kim pointed out that, ” With the delay in the replacement of IP generations and the arrival of a performance ice age, Baby Monster’s success and new IPs are necessary for sustainable growth,” adding, “It is a time when steps are needed to allay doubts about the production system.”
Kim Hyun-yong, a researcher at Hyundai Motor Securities, also evaluated YG Entertainment, saying, “They are currently quietly getting over the barley hill,” and, “The key to recovering performance next year is BLACKPINK’s resumption of full group activities, and Baby Monster should follow BLACKPINK’s growth trajectory in the long term.”
