[Click e-Stock] JYP Target Price Lowered... "Twice Contract Renewal Key"

Kiwoom Securities Sets JYP Target Price at 60,000 Won

Kiwoom Securities has revised its target price for JYP Entertainment downward from 81,000 won to 60,000 won. The firm diagnosed that, in order for the stock price to recover in the short term, the uncertainty surrounding the renewal of the entire "Twice" group’s contract must first be resolved.

On August 13, Kiwoom Securities stated in a company brief on JYP Entertainment, "The key variable this quarter is not earnings, but rather the changes in Twice’s contract renewal structure."

The previously disclosed operating profit for the second quarter amounted to 31 billion won, down 41.4% from the previous year, falling short of market consensus. Not only did concert revenue come in below estimates, but the cost of fan club kits was also recognized as a one-off expense during the second quarter’s fan club recruitment process, adding to margin pressure.

Added to this is the uncertainty over Twice’s contract renewal, which is emerging as the most critical issue moving forward. Jeonghyeon Park, an analyst at Kiwoom Securities, commented, "With the recent news of Jeongyeon from Twice leaving the group, there is now a high possibility that Twice will pursue group-only contract renewals, similar to Blackpink." She further explained, "This 'together but separate' structure means that it will likely take time for each member’s solo activities to be established, making it difficult to predict when the full group will make a comeback."

Accordingly, from a conservative standpoint, Kiwoom Securities has excluded Twice’s activities in the second half of this year and in 2027 from its projections, lowering its operating profit estimate by 17%. The target multiple was also cut from 20 times to 17 times, thus reducing the target price to 60,000 won. The previous day’s closing price of JYP Entertainment shares was 46,000 won.

Park emphasized, "In order for the share price to recover in the short term, the uncertainty needs to be resolved through confirmation that the full group will renew the contract, and which individual members choose to stay will also be a key variable."

She added, "The MD strategy has gained traction through city-by-city pop-up events linked to concerts and an expanded lineup of planned MD pop-ups, but it is unfortunate that this new variable has emerged just as a large-scale Stray Kids world tour is set to kick off in the second half of the year." Park continued, "With military enlistment for Stray Kids members approaching, this is a moment when the growth of younger IP is more important than the company’s short-term performance."

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