Hybe act Le Sserafim and Chairman Bang Si-hyuk [Bang Si-hyuk SNS]
Hybe act Le Sserafim and Chairman Bang Si-hyuk [Bang Si-hyuk SNS]

Brokerages have issued 19 target price cuts on Hybe, the entertainment company chaired by Bang Si-hyuk, even as BTS returns to full group activities — and the share price has plunged from a peak above 420,000 won ($303) to around 178,500 won, near its all-time low.

According to FnGuide, a financial data provider, Hybe ranked third among listed companies for downward target price revisions between July 1 and Sunday, trailing only JYP Entertainment with 28 and Hyundai Motor with 22.

Hybe's share price has continued to fall despite the company posting record quarterly earnings on the back of BTS's full-group comeback. On Thursday, the stock closed down at 178,500 won. The share price has been cut roughly in half this year.

Analysts point to concerns that the "BTS effect" may have peaked, with worries about weaker earnings in the second half of this year and next year weighing on the stock.

Concert revenue margins have also disappointed. Korea Investment & Securities cut its target price for Hybe from 400,000 won to 330,000 won, citing top-line growth from BTS tours but low profitability in the concert segment. NH Investment cut its target from 300,000 won to 270,000 won, citing deteriorating investor sentiment.

"Reflecting the worsening investor sentiment driven by peak market volatility, we are raising the discount rate applied relative to global peers from 10 percent to 20 percent and lowering the target price-to-earnings ratio from 33 times to 30 times," said Lee Hwa-jeong, an analyst at NH Investment.

Kyobo Securities trimmed its target from 350,000 won to 320,000 won, while iM Securities cut its Hybe target from 400,000 won to 330,000 won.

Hybe headquarters [Yonhap]
Hybe headquarters [Yonhap]

The paper value of Bang's stake in Hybe has also evaporated by more than 1 trillion won. Korea CXO Research Institute, a corporate analysis firm, surveyed the equity holdings of the heads of 46 major domestic conglomerates as of the second quarter and found that Bang suffered the steepest decline. His stock wealth shrank by 1.41 trillion won in a single quarter — a drop of 35.8 percent, the largest rate of decline among all those surveyed.

Meanwhile, Hybe posted record second-quarter consolidated sales of 1.45 trillion won and operating profit of 170.9 billion won — both the highest in the company's history — up 105.5 percent and 159.3 percent, respectively, from the same period last year. Even so, the share price continues to slide toward historic lows.


park@heraldcorp.com