YG Artists’ Activities and Concerns Over Rising Operating Expenses

On July 30th, NH Investment & Securities announced a 9% decrease in their target stock price for YG Entertainment, lowering it from 57,000 won to 52,000 won. This target stock price is projected for the second half of this year until the first half of next year, taking into consideration the possibility of multiple simultaneous activities and potential increases in expenses, such as labor costs and payments. According to NH Investment & Securities researcher Lee Hwa-jung, this would be an unprecedented occurrence for YG artists to have concurrent activities.

YG has just revealed their “2025 YG PLAN”which includes the exciting news of BLACKPINK’s comeback in the upcoming year and BABYMONSTER’s highly anticipated first world tour. In addition, they have plans for 2NE1 to reunite and tour the world. To celebrate their 8th debut anniversary this August, BLACKPINK will also hold an offline fan signing event. NH Investment & Securities confidently states that BLACKPINK is fully dedicated to their group activities.

NH researchers have revised their estimated annual album sales numbers for senior artists like TREASURE and BLACKPINK. They assert that with the entertainment industry in a transitional phase, there is a noticeable trend of existing fans of established artists shifting their support to newer artists. They further note that YG Entertainment is capitalizing on this trend through the success of their new group BABYMONSTER.

Moreover, they stated that the competitive debut of numerous rookie boy groups has led to an increase in people leaving fandoms. As a result, the prospects for TREASURE have been revised to a more cautious stance. Therefore, YG is in need of launching a new boy group. It is worth noting that TREASURE made their debut in 2020.

According to analysts’ consensus estimates, YG’s operating profit for the second quarter of this year is predicted to decrease by 87% to 3.9 billion won compared to the same period last year. Sales are also expected to decrease by 32% to 107 billion won. The decline in profits can be attributed to the ongoing debut promotions of BABYMONSTER and the initial costs associated with TREASURE’s arena tour. Additionally, the increase in amortization of intangible assets due to contract renewals for several artists last year is also expected to negatively impact the company’s performance.