April 27, 2024

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[THE INVESTOR] Chinese government’s regulation against Korean culture contents will ease faster than expected, said Hana Financial Investment on Nov. 13, raising the target price for YG Entertainment to 38,000 won (US$33.88) from 36,000 won.

The two countries have officially stated that they will endeavor to recover relationships at the summit meeting on Nov. 11, and the entertainment company will regain in China within the first half of next year, said analyst Lee Gi-hun.

Part of royalty revenue from Japan has been deferred to next year and Naver and Tencent, major platform providers in Korea and China, are its stakeholders, pointed out the analyst. Its affiliate YG Plus’ earnings will improve and the success of audition program “Mix Nine” might lift the bottom line further, he added.

The warming up of political climate could raise both YG’s earnings-per share and valuation next year despite the military duty of Big Bang members, noted the analyst suggesting a “buy” recommendation.

By Hwang You-mee (glamazon@heraldcorp.com)