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US momentum to build further

4Q24 preview: Revenue of W174.9bn and OP of W33bn

For 4Q24, we expect JYP Entertainment to report revenue of W174.9bn (above the consensus of W162.5bn) and operating profit of W33bn (below the consensus of W38.2bn).

Performance metrics were strong, backed by increased artist activities. Domestic album sales reached approximately 4mn copies; notable releases included Stray Kids’ Giant (Japan; 250,000 copies sold) and Hop (2mn copies), Twice’s Strategy (700,000 copies), and MiSaMo’s Haute Couture (100,000 copies). The number of Spotify streams increased to 1.8bn, similar to the level in 1Q24, when streaming revenue hit a record high. In addition, concert tours from Stray Kids, Day6, and MiSaMo (which are still ongoing) drove QoQ growth in both the number of performances (103) and per-show attendance. That said, there is some uncertainty regarding the timing of revenue recognition for Japan concerts. For merchandise (the main driver of the earnings surprise in 3Q24), we estimate revenue was W43.9bn.

2025 outlook: Positive expectations for both new and established artists

We raise our target price on JYP Entertainment to W90,000 (from W80,000), as we revised up our earnings estimates. For 2025, we look for revenue of W728.4bn (+26% YoY) and operating profit of W161.4bn (+30% YoY).

The stock has recently gained on momentum related to Stray Kids’ upcoming US concerts (scheduled for May-June). Based on Twice’s US stadium tour in 2023, we believe share price momentum is likely to build further.

We also advise monitoring the performance of the new boy group KickFlip, which will officially debut on Jan. 20. The music video for the group’s pre-release single “Umm Great” (released on its official YouTube account) recorded 11mn views in just two days and 13mn views after one week. In addition, NMIXX, Xdinary Heroes, and Nexz are likely to expand their fan bases through small-scale concerts/fan meetings. Meanwhile, we expect the business focus of subsidiary Innit Entertainment (established in 2024) to become clearer once the audition show The Entertainer (broadcast by KBS) finishes airing in 1Q25.