KORTIS and Cats Eye Fall Short..."HYBE Faces Unfair Undervaluation" [Click eJongmok]

Samsung Securities Lowers Target Price
From 330,000 Won to 280,000 Won

On July 30, Samsung Securities maintained its "Buy" investment rating on HYBE but lowered its target price from 330,000 won to 280,000 won.

Choi Minha, a researcher at Samsung Securities, stated, "In an environment of heightened short-term share price volatility, we are reducing our profitability outlook for this year and next year, leading to a 15% reduction in our target price. However, we believe HYBE's growth story remains intact, so we are maintaining our Buy rating."

Choi emphasized that HYBE's second quarter earnings this year exceeded market expectations. Revenue was 1.45 trillion won and operating profit was 170.9 billion won, representing a year-on-year increase of 105.5% and 159.4%, respectively—both record-high quarterly figures for the company. All business divisions showed strong year-on-year growth, with key artists such as KORTIS and Tomorrow X Together (TXT) achieving results above the million-seller threshold. Album sales reached 11.14 million units, and digital music also recorded strong performance.

He added that newer artists are experiencing rapid growth and that the medium- to long-term growth strategy is progressing smoothly. Choi said, "KORTIS expanded their fandom rapidly by achieving triple million-seller status with their second album and demonstrated rapid growth by launching a tour less than a year after debut. Cats Eye is clearly showing growth on Western music charts and has announced a second world tour, which will be broader in both region and scale, alongside the release of new albums."

Choi assessed that growth drivers are expanding from the existing artist lineup to next-generation artists and that sources of revenue are diversifying. However, he conservatively revised down the profitability outlook to reflect the increased contribution from top-tier artists, lowering this year's and next year's net profit attributable to owners of the parent by 15% and 11%, respectively. Accordingly, the estimated value of HYBE's label business was reduced from 13.3 trillion won to 11.3 trillion won, and the valuation of investment securities was lowered by excluding Supertone, which has entered liquidation procedures—resulting in a 15% reduction in the target price. He concluded, "Despite short-term price volatility, the medium- and long-term growth strategy remains on track, and the growth story is still valid."

This content was produced with the assistance of AI translation services.