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THE INVESTOR
April 24, 2019
Big Reunion

Industrials

K-pop agencies’ profits to rise 51.5% in 2019

  • PUBLISHED :April 11, 2019 - 14:01
  • UPDATED :April 11, 2019 - 14:08
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South Korean entertainment companies are expected to post solid profit growth this year despite the scandal centered on a K-pop boy band member, a local market tracker said on April 11.

According to forecasts by FnGuide, the operating profit for the big three labels -- S.M. Entertainment, JYP Entertainment, YG Entertainment -- could spike 51.5 percent on-year in 2019, following a similarly strong showing last year.


The estimate, based on the consensus of local brokerages, showed that combined profit of the three companies could hit 130.3 billion won ($114.3 million) for the whole of this year, up from 86 billion won tallied in 2018.

Broken down, the financial industry tracker said S.M.’s operating profit should stand at 60.8 billion won this year, with numbers for JYP and YG standing at 44.8 billion won and 24.6 billion won, respectively.

The strong numbers are noteworthy as Seungri, formerly a member of YG’s popular group Big Bang, is the focus of a snowballing criminal investigation that has, to some extent, tarnished the image of K-pop’s “clean” appeal. The disgraced star is accused of procuring sex services and possible involvement in a crime-riddled nightclub, Burning Sun, in southern Seoul.

The expected gains by the entertainment companies come as growth numbers for 262 listed companies checked by FnGuide, showed that operating profit is expected to drop 11.9 percent on-year to 159.35 trillion won for this year.

For the first quarter, initial consensus data showed operating profit of the three leading companies hitting 19.6 billion won, up 43.5 percent from a year earlier.

In addition to the three, if earnings of Big Hit Entertainment, the management of global boy band sensation BTS, is counted, numbers could be even higher this year, although details need to be checked. At present there is no earnings consensus being filed for Big Hit, which is a relative newcomer to the K-pop entertainment business world.

By Ram Garikipati and newswires (ram@heraldcorp.com)

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