April 27, 2024

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[THE INVESTOR] SM Entertainment’s artists are actively engaged which will lead to a solid earnings in its main business, said Mirae Asset Daewoo on May 15, maintaining a “buy” recommendation and 47,000 won (US$43.87) target price. 

Its earnings in the first quarter failed to meet market expectations, with 110.6 billion won revenue and 10.4 billion won operating profit, up 62.5 percent and 765.8 percent on-year, respectively. The figures are not bad, however, as the estimates did not fully reflect changes in accounting standards in Japan, according to analyst Park Jeong-yeop who noted that it highlighted the company’s focus on its flagship business.

Its revenue in the second quarter will leap 77.4 percent on-year to 120.1 billion won and operating profit by 735 percent to 11.5 billion won, forecast Park. 

TVXQ! has confirmed three concerts at a major stadium in June while next-generation artists including EXO-CBX, NCT and Red Velvet are fast gaining fans at home and abroad. Its subsidiary SM C&C has suffered in the first quarter but will improve, and its new affiliates Key East and FNC Add Culture will begin to contribute, noted Park.

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