[THE INVESTOR] YG Entertainment’s earnings in the fourth quarter last year will be strong, said KTB Investment and Securities on Jan. 2, maintaining a “hold” recommendation and 30,000 won (US$28.14) target price.
Its revenue will rise 15 percent to 80.7 billion won and operating profit by 189 percent to 10.2 billion won, satisfying market consensus, said analyst Lee Nam-jun.
Earnings momentum will be bolstered in the first quarter as revenue from Big Bang’s Japan tour will be reflected, noted the analyst.
YG Plus is suffering as cosmetics exports to China are restricted, but its loss is shrinking through cost-cutting, and cosmetics department, its largest loss-maker, is aiming to reach break-even point in the first half next year, according to Lee.
Concerns over the fact that revenue related to Big Bang, its major artist, is significantly dropping, from the second half of this year. The entertainment company will debut one boy band and one girl group this year to cushion this fall, and its valuation will depend on their successes, said the analyst.
By Hwang You-mee (firstname.lastname@example.org)