Alphabiz - SK Securities Cuts HYBE Target Price but Sees Earnings Rebound on BTS Comeback

Photo=HYBE

[Alpha Biz= Paul Lee] SK Securities has lowered its target price for HYBE by 16.7% to KRW 400,000, citing seasonal weakness in the first quarter. However, the firm maintained its “Buy” rating, expecting a strong earnings rebound starting in the second quarter driven by BTS’s comeback.

Analyst Park Jun-hyung projected HYBE’s first-quarter revenue at KRW 628.2 billion and operating profit at KRW 44.2 billion, representing year-on-year increases of 25.5% and 104.5%, respectively. However, operating profit is expected to fall short of the market consensus of KRW 50.8 billion.

The brokerage adjusted valuation multiples based on HYBE’s historical forward price-to-earnings ratio (PER), reflecting cost pressures from increased content production and higher artist settlement rates associated with major IP releases.

Despite higher costs, SK Securities noted that solid album sales—estimated at 9.15 million units following BTS’s recent release—along with strong North American demand and favorable exchange rates, are supporting revenue growth.

Performance in the concert segment is expected to soften year-on-year due to fewer events and high base effects from previous tours. Merchandise (MD) sales may also face short-term pressure but are anticipated to remain relatively resilient compared to typical first-quarter trends.

Looking ahead, SK Securities expects earnings momentum to accelerate from the second quarter as BTS embarks on a stadium-scale world tour beginning April 9, with performances concentrated in high-margin regions such as North America and Europe.

The firm also highlighted a broader lineup of artist comebacks across HYBE’s roster, which is expected to enhance earnings visibility and support record-high operating profit for the year.

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)