Buy These Stocks in October of Even-Numbered Years [Weekend Money]

Shinhan Securities Maintains Overweight Rating on Entertainment Stocks

Analysis has recommended overweighting entertainment stocks, saying they hit lows in October of even-numbered years and then staged sharp rebounds.

Ji In-hae, an analyst at Shinhan Securities, said, "The easing of risks, new momentum and the rapid pricing-in of future value have driven October rebounds in entertainment stocks," adding that a broad-based rally in entertainment stocks could continue from now through next year.

Ji analyzed that the share prices of the four entertainment companies—HYBE, SM Entertainment, JYP Entertainment and YG Entertainment—hit lows in October of the even-numbered years 2022 and 2024, then rebounded sharply. In 2022, the share prices fell amid institutional selling as uncertainty over activities grew due to issues surrounding BTS's military service. In fact, the group announced in June that it would temporarily suspend group activities. However, when all BTS members officially announced in October that they would enlist, uncertainty eased instead, and the share prices of the four companies combined, measured by total market capitalization, surged 150% over the eight months from the low through June 2023.

A similar pattern emerged in 2024. After bottoming in September, share prices soared 137% over approximately 17 months through February 2026. At the time, overall fan spending, measured by sales, increased as consumption expanded beyond albums to concerts, merchandise and other fan-related purchases. Concerns that the industry had peaked and was set to decline also subsided, while expectations grew for BTS members' return from military service in 2025, BLACKPINK's resumption of its world tour and the lifting of China's ban on Korean cultural content.

However, Ji stressed that market doubts about new momentum need to be dispelled. "What the October rebounds in even-numbered years had in common was that the easing of risks coincided with new momentum," she said. "Given that entertainment stocks tend to price in future value much faster than current earnings, the market's questions ultimately come down to whether profitability can improve even with BTS, and whether K-pop can continue growing after BTS's activities end in 2027."

Ji analyzed that, to ease risks, even a broad outline of BTS's activities in 2028 would be meaningful, regardless of whether the group renews its contracts. She also cited NewJeans' comeback, the success of HYBE's CORTIS and KATSEYE, HYBE's launch of global intellectual properties, and SM Entertainment's new boy group as potential sources of new near-term momentum, forecasting that any one of them could make a significant contribution to a share-price rebound. She further emphasized that if BTS makes a comeback, 2028 could mark a broad-based cycle in which activities by BTS and SEVENTEEN coincide with the monetization of fifth- and sixth-generation intellectual properties and the biennial activities of long-running intellectual properties.

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